President Donald Trump has refrained from ruling out the possibility of a recession in the United States, despite growing market concerns linked to his “America First” economic strategy.
In an interview that aired Sunday on Fox News, Trump was hesitant when asked whether he expected a recession to hit the world’s largest economy this year. “I’m not one to make predictions like that,” Trump said during his appearance on Sunday Morning Futures. “What we’re doing is very significant. We’re bringing wealth back to America, which is a major undertaking. It may take time, but in the end, I believe it will be incredibly beneficial for us.”
Trump’s remarks come at a time when markets are reacting anxiously to his shifting stance on tariffs and signs of an economic slowdown in the US. Just last week, Trump imposed a 25 percent tariff on imports from Mexico and Canada, while also doubling the duties on Chinese goods to 20 percent.
However, within 48 hours, he reversed course, announcing a postponement of certain tariffs on goods from Mexico and Canada until April 2.
This back-and-forth has rattled markets, with the S&P 500 index suffering a 3 percent drop last week, marking its worst performance since September.
On Thursday, the Atlanta Federal Reserve downgraded its estimate for the first quarter of 2025, now forecasting a contraction of 2.4 percent, down from the previous estimate of 2.3 percent growth. On Friday, Goldman Sachs raised its recession probability for the next 12 months from 15 percent to 20 percent.
Despite these concerns, there were also some positive signs. The US Bureau of Labor Statistics reported the addition of 151,000 jobs in January—slightly below expectations but in line with the 2024 average.
In contrast to the more cautious tone from the President, US Commerce Secretary Howard Lutnick dismissed talk of a recession in an interview later that day with NBC’s Meet the Press. “Donald Trump is a winner, and he will deliver for the American people,” Lutnick confidently stated. “There will be no recession in America. I’d bet my money on that.”
