Washington, United States — President Donald Trump refused to rule out the possibility of a recession in 2025, stating that the U.S. economy is going through a transition period as his administration implements major economic changes.
Trump Stays Vague on Recession Concerns
When asked in a Fox News interview about the likelihood of a recession this year, Trump responded, “I hate to predict things like that.”
He emphasized that the country is undergoing a period of adjustment, saying, “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.”
Commerce Secretary Denies Recession Fears
Despite Trump’s cautious remarks, Commerce Secretary Howard Lutnick took a firmer stance when asked about the possibility of an economic downturn.
“Absolutely not,” Lutnick said in an interview on NBC’s “Meet the Press”, dismissing concerns that Americans should prepare for a recession.
Stock Markets and Consumer Confidence Shaken
Recent tariff threats by Trump against Canada, Mexico, and China have unsettled U.S. financial markets, leading to the worst stock market week since the November election.
Consumer confidence has also dropped, with Americans bracing for higher prices due to tariffs while dealing with inflation and widespread government layoffs pushed by Trump’s economic advisor Elon Musk.
Conflicting Economic Indicators
The Atlanta Federal Reserve index now forecasts a 2.4% contraction in real GDP growth for the first quarter of 2025, marking the worst decline since the height of the COVID-19 pandemic.
However, economic policy remains uncertain as Trump’s tariff plans continue to shift, with changing effective dates and targeted sectors, leaving businesses and investors scrambling to adjust.
Trump Administration Defends Economic Strategy
Trump’s chief economic advisor, Kevin Hassett, addressed concerns about whether tariffs would be temporary or permanent, explaining that their duration depends on how targeted countries respond.
“If they failed to respond positively, the result could be a ‘new equilibrium’ of continuing tariffs,” Hassett said.
Meanwhile, the administration insists that while the economy may go through a “bumpy transition,” the long-term outlook remains positive.
Mixed Predictions from Economists
In his State of the Union address, Trump acknowledged a potential economic impact, telling Americans to expect “a little disturbance” as tariffs take effect but reassuring them, “We’re okay with that. It won’t be much.”
Treasury Secretary Scott Bessent also described this phase as a “detox period” as the government reduces spending.
Despite this confidence, economists remain cautious.
- Goldman Sachs raised its recession odds for the next 12 months from 15% to 20% due to Trump’s policies.
- Morgan Stanley predicted “softer growth this year” than initially expected.
A recession is generally defined as two consecutive quarters of weak or negative GDP growth. The U.S. last entered a recession in early 2020 during the COVID-19 pandemic, when millions of Americans lost their jobs.
With the economic outlook still uncertain, experts are watching closely how Trump’s trade policies and spending cuts will impact growth in the months ahead.
