Washington:
President Donald Trump refused in an interview on Sunday broadcast to exclude the possibility that the United States could enter a recession this year.
“I hate to predict things like that,” he told a Fox News interviewer when it was immediately asked about a possible recession in 2025.
“There is a period of transition, because what we do is very large – we bring wealth back to America,” he said, adding it, “it takes a little time.”
But Trump’s trade secretary, Howard Lutnick, was more final when he was asked on Sunday about the possibility of a recession.
“Absolutely not,” he told NBC’s “Meet the Press” when he was asked if Americans should scrape for a recession.
Trump’s on-again, off-again tariff threats against Canada, Mexico, China and others have left the American financial markets in turmoil and consumers certainly what the year could bring.
Stock markets have just ended their worst week since the November elections.
Consumer confidence measures have fallen because shoppers – already damaged by years of inflation – a brace position for the higher prices that can bring rates.
And widespread government deducts that are designed by Trump’s billionaire adviser Elon Musk adds further concern.
Some signs are mixed.
A broadly viewed Atlanta Federal Reserve Index now predicts a contraction of 2.4 percent of the real GDP growth in the first quarter of the year, which would be the worst result since the level of the COVID-19 Pandemie.
Much of the uncertainty stems from Trump’s shifting rate policy – effective dates have changed, just like the sectors that are the target – while companies and investors try to puzzle what will come.
Kevin Hassett, Trump’s most important economic adviser, was asked at ABC whether rates were mainly temporary or could become permanent.
Hassett said that was dependent on the behavior of the targeted countries. If they did not respond positively, he said, the result could be a “new balance” of continuous rates.
The administration has insisted that although the economy will pass a potentially bumpy “transition”, things go in a positive direction.
In his state of the union offering on Tuesday, Trump told Americans to expect “a little malfunction” as rates, while adding: “We are good with that. It won’t be much.”
And his Finance Minister Scott Bessent has warned about a “detox period” while the economy lowers government spending.
Given the uncertainties, economists have been wary of making fixed predictions.
Economists at Goldman Sachs, stating Trump’s policy, have increased their chance of a recession in the coming 12 months from 15 percent to 20 percent.
And Morgan Stanley predicted “softer growth this year” than previously expected.
Recessions are generally defined as two consecutive neighborhoods of weak or negative GDP growth.
The US was short in a recession at the beginning of 2020 when the Covid Pandemie spread. Millions of people lost jobs.
(Except for the headline, this story was not edited by NDTV staff and has been published from a syndicated feed.)