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How do geopolitical risks and uncertainty shape US consumer confidence?

Author

Listed:
  • Moustapha Badran

    (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)

  • Mohamed Awada

    (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)

  • Joanna Darwiche

    (Saint-Joseph University of Beirut)

  • Whelsy Boungou

    (PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université)

Abstract

This study examines the impact of trade and monetary policy uncertainty during geopolitical shocks on U.S. consumer confidence. Using monthly data from January 1993 to June 2024, we find that both trade and monetary policy uncertainties have significantly shaped U.S. consumer confidence during major geopolitical events. Moreover, trade policy uncertainty significantly worsens consumer confidence during heightened geopolitical tension, while monetary policy uncertainty tends to stabilize sentiment. Our findings suggest that policymakers should implement clear and consistent trade policies during geopolitical unrest and effectively use monetary policy to reassure consumers. Ultimately, this research underscores the importance of addressing trade and monetary uncertainties to bolster economic resilience and enhance consumer confidence in challenging times.

Suggested Citation

  • Moustapha Badran & Mohamed Awada & Joanna Darwiche & Whelsy Boungou, 2025. "How do geopolitical risks and uncertainty shape US consumer confidence?," Post-Print hal-05083249, HAL.
    • Handle: RePEc:hal:journl:hal-05083249
    DOI: 10.1016/j.econlet.2024.112115
    Note: View the original document on HAL open archive server: https://hal.science/hal-05083249v1
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    References listed on IDEAS

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    Cited by:

    1. Lin, Boqiang & Lan, Tianxu, 2025. "The influence of coal price uncertainty on investment and consumption dynamics: Evidence from China," Energy Policy, Elsevier, vol. 198(C).

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