Voters reinstated President Donald Trump’s pledge to reduce costs on Day One and usher in a new “golden age” of British success.
But the startling speed of his executive behavior has unnerved some economists who are projecting a slump or even a crisis. Yet the typically optimistic Trump acknowledged during his shared address to Congress that there might be “little disturbance.”
Trump’s swift-fire tariffs on China, Canada, and Mexico, with more mutual tariffs on all exports scheduled to start in the first month, are a source of further financial concern. Coupled with the thaws on government spending and hundreds of national cuts through Elon Musk’s Department of Government Performance, some academics are sending word to Washington that the ability of 11 right apartments of GDP growth in the United States may be ending.
There is no denying that the risk of a crisis has increased and is increasing, according to Bankrate top economic researcher Mark Hamrick on Wednesday.
The group’s poll of economics last year found that the odds of a 2025 crisis were at an all-time low, according to Bankrate’s survey of economists. But, since then, the conflict have risen to 1-in-3 under Hamrick’s individual forecast.
First Trust’s chief economist, Brian Wesbury, cited” disturbing evidence” from a decline in retail income, housing starts, and manufacturing output. Trump’s taxes risks hurt gross domestic product, and employment claims ticked up poverty claims.
” I also expect a downturn”, Wesbury told Fox Business. This is not the Great Depression, they say. Never yet 2000. We’re certainly in 2009. We’ll experience some problems, but we must first do so before we can achieve the goal.
The Trump presidency has publicly dismissed concerns about negative financial forecasting. White House press director Karoline Leavitt said Wednesday that even though Trump did appreciate rising prices and property markets tumbling during his national address to Congress on Tuesday, the blame for that problems lies with President Joe Biden.
She said that President Trump “leveled set with the American citizens on the business” and “exposed how terribly Joe Biden screwed it up by causing the worst inflation issue in four years” President Trump made it clear that assistance is on the approach while being truthful about where we are. As the chairman declared last night, he may make America cheap again”.
However, there are concerns.
Howard Lutnick, the secretary of commerce, suggested that he could alter the way the government measured GDP to prevent the effects of the DOGE state paying breaks. Trump, Trump’s key cost cutting, backed Lutnick’s fascinating technique in a blog on X, the social media platform he owns.
Government expenditures would not be included in a more precise GDP measurement, according to Musk. Usually, you can artificially raise GDP by spending money on things that don’t improve people’s lives.
Democrats, who have been caught flat-footed by Trump’s deluge of professional behavior, see an opening to place numbers at the GOP combination in Washington for looming financial woes.
Sen. Elissa Slotkin (D-MI ) stated in the Democratic response to Trump’s joint address that” the national debt is going up, not down.” And if he’s no careful, he might plunge us straight into recession.
What is a crisis?
Not just when people are uneasy about the market or the high cost of groceries, there is a crisis. The labour market, closely followed by the GDP, is the main indication of a crisis, followed closely by the GDP.
A traditional rule of thumb is that two consecutive quarters of negative GDP growth constitutes a crisis, although that isn’t always the situation.
Since the next quarter of 2022, the GDP has grown annually. GDP increased by 2.8 % overall in 2024, according to a preliminary estimate provided by the government.
But in a worrying sign, the Atlanta Fed’s” GDPNow” sensor predicts that GDP growth in the first quarter may fall by 2.8 %, according to the latest estimate.
Additionally, a crucial indicator of U.S. manufacturing activity slowed to near-stagnation rates in February, raising questions even more.
U.S. bond yields decreased to record lows this week, in part as a result of the manufacturing survey data, and were also raised by concerns about a sluggish U.S. economy’s growth and productivity in the year ahead.
Rep. Ryan Mackenzie (R-PA ) said recession concerns are “premature”, noting that there have not been two successive negative GDP quarters yet.
He warned against using recession-related jargon because it would “be a self-fulfilling prophecy.”
People actually start putting their money back into the market, Mackenzie said, “if people are concerned about a possible recession that isn’t true at this point in time, but you start talking that off,” Mackenzie said.
Tariffs threatening high prices
Trump campaigned for increasing tariffs. Some on Wall Street dismissed the tariff threat during the campaign as bluster or a negotiating maneuver to obstruct other nations ‘ demands.
But this week showed that Trump isn’t bluffing on tariffs.
25 % tariffs on Mexico and Canada came into effect this week after a monthlong delay. Additionally, more tariffs have been levied against China. Most economists argue that tariffs are inflationary as the increased costs are ultimately passed through to the consumer in a way akin to a tax.
The Dow Jones Industrial Average lost roughly 1,300 points on Monday and Tuesday alone, but recovered some of those losses on Wednesday. The stock market reacted negatively.
Sen. Ted Cruz (R-TX ) claimed that Trump’s tariffs are being used to pursue U.S. interests, such as preventing drug trafficking into the country.
” That being said, Texas does an enormous amount of trade and commerce with both Mexico and Canada”, Cruz added. Therefore, it is my hope that these tariffs are very short-lived and that they carry out their intended purpose, which is to encourage Mexico and Canada to act aggressively and secure our border.
A recession would have negative political effects for Republicans. The GOP ran successfully on lowering costs and fixing the economy in the 2024 elections, but much of the House GOP’s conference’s focus since taking control of Washington in 2025 has been on immigration and culture war bills.
Republicans may struggle to persuade voters that their policies will help the economy in 2026, especially given that the House has historically flipped to the party’s extreme during the midterm elections. Tariffs are expected to raise prices.
Given the concern over tariffs, Hamrick noted that the stock market has faced a challenging time.
” And that speaks to the challenges associated with the outlook and the real damage that tariffs can cause with respect to the economy and business performance”, he said.
White House minimizes the impact of the economy
White House officials spoke with less confidence behind closed doors, which was exacerbated by contradictory statements made by Lutnick, the commerce secretary, and Peter Navarro, the senior trade and manufacturing official.
Ahead of the presidential address, Lutnick said he expected Trump to carve out exemptions for some goods from the 25 % levies placed on Canada and Mexico, suggesting they were motivated by markets plummeting for two consecutive days after the tariffs went into effect earlier this week.
The big three U.S. auto companies received a one-month exemption on Wednesday, according to Trump’s announcement to recoup their manufacturing operations for the least amount of money in the interim.
On the other hand, Navarro, the biggest tariff hawk in the president’s council of advisers, made the suggestion on Wednesday that Trump’s tariff agenda is predetermined.
” We’ve had two days of volatility in the markets and everybody’s hair is on fire”, he said on CNN. The issue is that each nation in the world where we trade has higher tariffs and non-tariff barriers. And Canada is without a doubt no exception to that. They stick it to us on lumber, they stick it to us on dairy, they stick it to us on a wide variety of products. And the president won’t allow that to continue.
Democrats ‘ efforts to form an effective, organized opposition to the president’s agenda have largely failed during Trump’s first six weeks in office. But party operatives largely see the daylight within Trump’s own team, worsening economic sentiment across the general public, and a lack of concrete policies to immediately address inflation as the perfect vehicle to attack the president.
JEFFRIES REQUEST A” DIGNIFIED” RESPONSE, DEMOCRATIC PROTESTS OF TRUMP ADDRESS
Andrew Bates, a Democratic strategist and former deputy press secretary under Biden, told the Washington Examiner,” A lot of people watched that speech and said,” I voted for this guy because he promised to end the devastating inflation crisis immediately.” ” But now he’s in power, inflation’s rising, I’m more concerned about the economy than before, and all I see him doing on my top issue is raising prices with tariffs that fund tax giveaways to the rich”.
” The costs were the whole point for a lot of people,” he said. They hold their noses, according to a second veteran Democratic operative,” but they don’t like a lot of the rest.” ” He keeps acting like promises mean nothing, and that is not how voters feel”.
This report was written by Lauren Green and Christian Datoc.
