Is the US on the brink of recession?
Trump dismisses warnings, but markets and analysts believe slump is near
President Donald Trump has dismissed warnings that the US could be close to a recession, insisting the economy is doing “tremendously well”.
Last week, financial markets indicated a recession - when an economy shrinks for two consecutive quarters - could be on the cards, when it became cheaper for the US government to borrow for ten years, rather than two.
As the BBC points out, this phenomenon - known as an “inverted yield curve” - is frequently a harbinger of recession, or at least a significant slowdown in economic growth.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Furthermore, a study released yesterday showed that a majority of economists polled by the National Association for Business Economists expect a recession in the US within the next two years.
The economists “have previously expressed concern that Trump’s tariffs and higher budget deficits could eventually dampen the economy”, the Associated Press reports.
However, the US president was having none of it, telling reporters: “I don't see a recession. The world is in recession right now.
“We're doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they're loaded up with money.”
He added: “Most economists actually say we are not going to have a recession. Most of them are saying we will not have a recession, but the rest of the world is not doing well like we are doing.”
The New York Times says that Trump has privately expressed concerns that opponents are exaggerating the prospects of an economic slump to damage his re-election chances.
Earlier, the White House’s economic adviser, Larry Kudlow, had insisted that there was “no recession in sight”.
Kudlow added: “Consumers are working. Their wages are rising. They are spending and they are saving.”
Whether imminent or not, many believe a downturn is inevitable if Trump continues to back punishing trade tariffs on major US trade partners like China and the EU.
Writing for The Independent, Max Burns argues that “the US is being pushed towards recession – and it's totally unclear whether Trump understands what he's done”.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'Making a police state out of the liberal university'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
8 looming climate tipping points that imperil our planet
The Explainer New reports detail the thresholds we may be close to crossing
By Devika Rao, The Week US Published
-
Try 6 free issues of The Week Junior
Spark your child's curiosity with The Week Junior - the award-winning current affairs magazine for 8-14s.
By The Week Published
-
Can Trump get a fair trial?
Talking Points Donald Trump says he can't get a fair trial in heavily Democratic Manhattan as his hush money case starts
By Harold Maass, The Week US Published
-
What RFK Jr.'s running mate pick says about his candidacy
Talking Points Robert F. Kennedy Jr.'s' running mate brings money and pro-abortion-rights cred to his longshot presidential bid
By Harold Maass, The Week US Published
-
New York may seize Trump's assets for $450M penalty
Speed Read The former president likely owes $600 million from two civil judgments in New York
By Peter Weber, The Week US Published
-
How the world economy learned to live with the drama
Under the Radar As economists predict a 'soft landing' after recent crises, is the global economy now 'oblivious to the new world disorder'?
By Elliott Goat, The Week UK Published
-
Could Fed interest rate cuts tip the election?
Talking Point The central bank could make interest rate cuts during a campaign focused on the economy
By Harold Maass, The Week US Published
-
How long can consumers keep the economy humming?
Talking Point Consumers boosted growth, defying recession warnings. The question is whether 2024 will be different.
By Harold Maass, The Week US Published
-
How did America avoid a recession in 2023?
Today's Big Question A downturn was inevitable. Until it wasn't.
By Joel Mathis, The Week US Published
-
Will the UK economy bounce back in 2024?
Today's Big Question Fears of recession follow warning that the West is 'sleepwalking into economic catastrophe'
By Chas Newkey-Burden, The Week UK Published