Trump refuses to rule out potential US recession in 2025
What's the story
US President Donald Trump has refused to rule out a recession in 2025.
When asked by Fox News about a possible economic downturn, Trump said, "I hate to predict things like that."
However, he continued to elaborate on how his administration was bringing wealth back to America, saying, "There is a period of transition, because what we're doing is very big."
Official stance
Trump's commerce secretary contradicts potential recession claims
Howard Lutnick, Trump's commerce secretary, has a different take on the possibility of an economic downturn.
Asked if Americans should prepare for a recession, he confidently replied, "Absolutely not."
But the statement stands in stark contrast to mixed signals emerging from the market and consumer sentiment.
The stock market recently had its worst week since the November election, while measures of consumer confidence have also dipped.
Economic impact
Tariff threats and market volatility
Trump's shifting tariff policies against Canada, Mexico, China, and others have led to market volatility.
The uncertainties have kept consumers in the dark about what the year might bring.
A widely watched index from the Atlanta Federal Reserve projects a 2.4% contraction in real GDP growth for Q1 of 2025, which would be the worst performance since the height of the COVID-19 pandemic.
Future of tariffs
Trump's chief economic advisor comments on tariffs
When Trump's chief economic advisor, Kevin Hassett, was asked on ABC News whether these tariffs were permanent, he said it depended on how the targeted countries respond.
If they don't make positive adjustments, he hinted that the result could be a "new equilibrium" of continuing tariffs.
The economic uncertainty stems from Trump's shifting tariff policy—effective dates have changed, and the sectors being targeted have changed—as businesses and investors try to figure out what will come next.