Trump declines to rule out 2025 US recession

WASHINGTON - US President Donald Trump declined in an interview aired on March 9 to rule out the possibility that the US might enter a recession in 2025.

“I hate to predict things like that,” he told a Fox News interviewer when asked directly about a possible recession in 2025.

“There is a period of transition, because what we’re doing is very big – we’re bringing wealth back to America,” he said. “It takes a little time.”

But Commerce Secretary Howard Lutnick was more definitive when asked on March 9 about the possibility of a recession.

“Absolutely not,” he told NBC’s Meet the Press when asked whether Americans should brace themselves for a downturn.

Mr Trump’s

on-again, off-again tariff threats

against Canada, Mexico, China and others have left the US financial markets in turmoil and consumers unsure what the year might bring.

Stock markets just ended their worst week since the election in November 2024.

Measures of consumer confidence are down, as shoppers – already battered by years of inflation – brace themselves for the higher prices that tariffs can bring.

And widespread government layoffs being engineered by Mr Trump’s billionaire adviser Elon Musk add further concern.

When asked later on March 9 to clarify his remarks on whether there could be a recession, Mr Trump told reporters on Air Force One: “Who knows?”

Overall, the signs are mixed.

A widely watched Atlanta Federal Reserve index now predicts a 2.4 per cent contraction of real gross domestic product growth (GDP) in the year’s first quarter, which would be the worst result since the height of the Covid-19 pandemic.

Much of the uncertainty stems from Mr Trump’s shifting tariff policy – effective dates have changed, as have the sectors being targeted – as businesses and investors try to puzzle out what will come next.

Mr Kevin Hassett, Mr Trump’s chief economic adviser, was asked on ABC whether tariffs were primarily temporary or might become permanent.

Mr Hassett said that depended on the behaviour of the countries targeted. If they failed to respond positively, he said, the result could be a “new equilibrium” of continuing tariffs.

The administration has insisted that while the economy will pass through a possibly bumpy “transition”, things are headed in a positive direction.

In his

State of the Union address

on March 4, Mr Trump told Americans to expect “a little disturbance” as tariffs take hold, while adding: “We’re okay with that. It won’t be much.”

Treasury Secretary Scott Bessent has also warned of a “detox period” as the economy cuts government spending.

Given the uncertainties, economists have been wary of making firm predictions.

Economists at Goldman Sachs, citing Mr Trump’s policies, have raised their odds of a recession over the next 12 months from 15 per cent to 20 per cent.

Morgan Stanley predicted “softer growth this year” than earlier expected.

Recessions are generally defined as two consecutive quarters of weak or negative GDP growth.

The US was briefly in recession in early 2020 as the Covid-19 pandemic spread. Millions of people lost jobs. AFP