In a cautionary tone, Mark Zandi, chief economist at Moody’s Analytics, warned that President Donald Trump’s tariff policies may be nudging the U.S. economy towards recession. Zandi explained to CNN, “This feels like we’re being pushed into a recession,” indicating a sharp difference between perception and reality in economic health.
The unsettling signals from economists reflect a growing tide of concern regarding the U.S. economy, spurred by erratic stock markets and consumer confidence drops. Such apprehensions are exacerbated by the retaliatory repercussions stemming from Trump’s controversial trade strategies designed to counteract perceived inequities posed by foreign trade partners.
Zandi articulated a recession risk that remains alarmingly elevated, suggesting a plausible outcome hinges significantly on the president’s future actions. He specifically pointed out the potential implosion caused by proposed reciprocal tariffs as they may heighten economic strain if maintained long-term amidst other prevailing uncertainties.
The White House defends these tariffs, believing they will mitigate the trade deficit and enhance domestic economic vitality, supposedly serving American interests. Zandi warns, however, that the collective national mood is precariously fragile, noting that simple policy shifts could inadvertently crank up the risk of recession.
He described this potential downturn as an unusual scenario—”recession by design,” where robust economic performance is undermined by policy decisions. Various factors, including immigration policy and government funding cuts, could push the economy into bleak territory, handing the reigns of fate over to the administration’s decisions.
In discussing market reactions, White House press secretary Karoline Leavitt suggested the stock market’s volatility is a momentary snapshot amid a broader narrative of economic transition since Biden’s administration. Conversely, Treasury Secretary Scott Bessent reminded observers that the unpredictability of outcomes—such as the impact of unforeseen events like COVID—clouds guarantees of stability. Federal Reserve Chair Jerome Powell attributed some inflation increases to tariffs, adding more complexity to the debate.
While fears of recession loom, some experts urge caution in heeding economic forecasts, pointing out that many predictions historically lingered after markets already veered. As Trump’s steep tariffs on steel and aluminium roll out, all eyes are on forthcoming policy changes slated for April, with a keen sense of caution prevailing in economic circles.
Mark Zandi from Moody’s Analytics warns that Trump’s tariff policies might be steering the U.S. economy toward recession. He indicates the looming threat is tied to the fragile consumer confidence and volatile markets. The White House views these tariffs as necessary, but Zandi warns that a downturn could arise from various policy decisions.
In summary, the dialogue around potential recession risks under Trump’s tariff policies is intensifying, combining warnings from economists like Mark Zandi with responses from the White House. Concerns hinge on the fragility of consumer confidence and market volatility, intertwined with the implications of foreign trade tariffs and domestic policy actions. As these economic dynamics unfold, the prospect of a recession seems increasingly plausible, urging stakeholders to remain vigilant.
Original Source: www.newsweek.com
