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US President Donald Trump on Sunday declined to rule out the possibility of a US recession in 2025, citing economic transition as his administration pursues policies aimed at reshaping global trade.
Speaking to Fox News, Trump said, “I hate to predict things like that,” when asked directly about a potential downturn. He insisted that his administration was “bringing wealth back to America”, but acknowledged that “it takes a little time.”
His Commerce Secretary, Howard Lutnick, was more definitive, telling NBC’s ‘Meet the Press’, “Absolutely not,” when asked if Americans should brace for a recession.
Concerns over a potential economic slowdown have been heightened by Trump’s shifting tariff policies, which have created uncertainty for businesses, investors, and consumers.
Stock markets just posted their worst week since the November election. Consumer confidence has declined as Americans brace for rising prices due to tariffs. Mass government layoffs, overseen by Trump’s advisor Elon Musk, have further shaken economic stability.
Adding to the mixed signals, the Atlanta Federal Reserve now projects a 2.4% contraction in GDP for Q1 2025, the worst since the early Covid-19 pandemic.
Trump’s top economic advisors have offered contrasting views on the recession risks. Kevin Hassett, Trump’s chief economic advisor, suggested that if foreign countries fail to adjust to new tariffs, the US could enter a “new equilibrium” of prolonged trade barriers.
Treasury Secretary Scott Bessent has warned of a “detox period” as the government cuts spending, a move that could slow growth.
Meanwhile, in his State of the Union address, Trump told Americans to expect “a little disturbance” due to tariffs but insisted it “won’t be much.”
Given the uncertainties, leading Wall Street analysts have adjusted their forecasts: Goldman Sachs raised its recession odds from 15% to 20% over the next year. Morgan Stanley warned of softer growth than previously expected.
With Trump’s tariff threats creating market instability, businesses and investors remain wary of what’s ahead. The administration maintains that economic “adjustments” will lead to long-term gains, but signs of slowing growth have raised concerns that the US could face a recession sooner than expected.
