Uncertainty Surrounds Possibility of Recession in 2025
Trump’s Uncertainty
President Donald Trump has declined to rule out the possibility of a recession in 2025, stating, "I hate to predict things like that." In an interview with Fox News, he added, "There is a period of transition, because what we’re doing is very big – we’re bringing wealth back to America. It takes a little time."
Contrasting Opinions
However, Trump’s commerce secretary, Howard Lutnick, was more definitive when asked about the possibility of a recession, stating, "Absolutely not." He told NBC’s "Meet the Press" that Americans should not expect a downturn.
Market Volatility
Trump’s on-again, off-again tariff threats against Canada, Mexico, China, and others have left the US financial markets in turmoil, with stock markets experiencing their worst week since the November election. Consumer confidence is down, and shoppers are bracing for higher prices that tariffs can bring. Widespread government layoffs engineered by Trump’s billionaire advisor Elon Musk have added to the concern.
Mixed Signs
Some signs are mixed. A widely watched Atlanta Federal Reserve index now predicts a 2.4% contraction of real GDP growth in the year’s first quarter, which would be the worst result since the height of the Covid-19 pandemic. However, the administration has insisted that the economy will pass through a possibly bumpy "transition," with things headed in a positive direction.
Economist Predictions
Given the uncertainties, economists have been wary of making firm predictions. Economists at Goldman Sachs have raised their odds of a recession over the next 12 months from 15-20%, while Morgan Stanley predicts "softer growth this year" than earlier expected. Recessions are generally defined as two consecutive quarters of weak or negative GDP growth.
Conclusion
The possibility of a recession in 2025 remains uncertain, with President Trump’s administration offering mixed signals. While some signs point to a potential downturn, others suggest a positive direction. As the economy navigates a potentially bumpy "transition," economists will continue to monitor developments closely.
Frequently Asked Questions
- What is a recession?
A recession is a period of economic decline, typically characterized by two consecutive quarters of weak or negative GDP growth. - What are the signs of a recession?
Some signs of a recession include a decline in consumer confidence, higher prices due to tariffs, and widespread government layoffs. - Who is predicting a recession?
Economists at Goldman Sachs and Morgan Stanley have predicted a recession over the next 12 months, with odds ranging from 15-20%. - What is the administration’s stance on the possibility of a recession?
President Trump has declined to rule out the possibility, while his commerce secretary has stated that a recession is not likely.