President Donald Trump, in an interview aired on Sunday, refused to rule out the possibility of the United States entering a recession this year.
“I hate to predict things like that,” he told a Fox News interviewer when asked directly about a possible recession in 2025.
“There is a period of transition, because what we’re doing is very big — we’re bringing wealth back to America,” he said, adding, “It takes a little time.”
But Trump’s commerce secretary, Howard Lutnick, was more definitive when asked Sunday about the possibility of a recession.
“Absolutely not,” he told NBC’s “Meet the Press” when asked whether Americans should brace for a downturn.
Trump’s fluctuating tariff threats against Canada, Mexico, China, and other countries have unsettled U.S. financial markets, leaving consumers uncertain about the year ahead.
Stock markets have just experienced their worst week since the November election.
Meanwhile, consumer confidence has declined as shoppers—already strained by years of inflation—prepare for the potential price hikes that tariffs could bring.
Widespread government layoffs orchestrated by Trump’s billionaire advisor, Elon Musk, have added to growing concerns.
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Some economic indicators show mixed signals.
A closely watched Atlanta Federal Reserve index now forecasts a 2.4% contraction in real GDP growth for the first quarter, which would be the worst performance since the peak of the COVID-19 pandemic.
Much of the uncertainty stems from Trump’s shifting tariff policies—effective dates and targeted sectors have changed, leaving businesses and investors scrambling to anticipate what comes next.
Trump’s chief economic advisor, Kevin Hassett, was asked on ABC whether the tariffs were temporary or could become permanent. He responded that it would depend on how the targeted countries reacted. If they failed to respond positively, he said, the result could be a “new equilibrium” where tariffs remain in place.
Despite concerns, the administration insists that while the economy may face a rough “transition,” it is ultimately on the right track.
In his State of the Union address on Tuesday, Trump acknowledged a “little disturbance” as tariffs take effect but reassured Americans, saying, “We’re okay with that. It won’t be much.”
Treasury Secretary Scott Bessent also warned of a “detox period” as the economy adjusts to reduced government spending.
Given the uncertainties, economists have been cautious in their predictions.
Goldman Sachs, citing Trump’s policies, raised the probability of a recession within the next 12 months from 15% to 20%.
Morgan Stanley also revised its forecast, predicting slower growth this year than previously expected.
A recession is typically defined as two consecutive quarters of weak or negative GDP growth.
The U.S. briefly entered a recession in early 2020 during the COVID-19 pandemic, causing millions of job losses.
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