Donald Trump isn’t willing to rule a recession as his tariffs spark concern for the US economy.
The president said “I hate to predict things like that” when asked if he was expecting a downturn this year.
Major US stock indexes dropped on Monday after Trump said the US is in a “period of transition.”
Donald Trump isn’t willing to rule out a possible recession in 2025 as his tariff policy fuels economic concern.
Appearing on Fox News’ “Sunday Morning Futures,” the president was asked if he was expecting a recession, prompting the response “I hate to predict things like that.”
He added: “There is a period of transition, because what we’re doing is very big. We’re bringing back wealth to America. That’s a big thing, and there are always periods of, it takes a little time, it takes a little time.”
US stock indexes weren’t reassured by Trump’s response, falling sharply on Monday after capping its worst weekly loss in months on Friday. The S&P 500 and Dow Jones industrial average fell roughly 1% apiece, while the tech-heavy Nasdaq — already in correction territory — lost 2%.
The recent weakness reflects growing concerns around an economic slowdown, particularly as Trump has followed through with his plans to levy tariffs and implement sweeping job cuts across the federal government.
According to the online betting platform Polymarket, the priced-in odds of a recession climbed to 41% on Monday, up from 20% in early January.
Prognosticators on Wall Street have also warned of the rising risk of a downturn, despite most forecasters expecting a soft landing at the start of the year.
On Monday, Goldman Sachs raised its 12-month recession probability to 20% from 15%, citing risks from “policy changes” in the new administration.
“If policy headed in the direction of our risk scenario or if the White House remained committed to its policies even in the face of much worse data, recession risk would rise further,” analysts wrote in a note.
Jeffrey Solomon, the president of TD Cowen, said he believed a full-blown trade war could spark a chain reaction that could lead to a US recession in the second half of the year.
“People have to take a breather and say: ‘Wow, is this real? Is it not real? What’s going to happen with it? I can’t really afford to make any capital investments until I understand what the landscape looks like,'” Solomon said, speaking to CNBC last week. “And that’s kind of what’s happening.”
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