US President Donald Trump visits on March 7, 2025 at the White House of the White House in the White House in Washington, DC, USA.
Evelyn Hockstein | Reuters
The volatility of the global market and the geopolitical turbulence according to President Donald Trump's return to the White House have led to warnings that the US economy could switch to recession – but say economists that a downturn is not yet in the cards.
“I don't think we will talk about a US recession. The US economy is resistant, I would say, especially despite Donald Trump,” said Holger Schmieding, chief economist at Berenberg Bank, to CNBCS “Squawk Box Europe” on Monday.
Schmieding refers to the “agent of chaos and confusion” and said that the “zigzag for the President's Zölle” shows that he hardly has an idea of the potential consequences of his tariff policy “.
Nevertheless, US consumers have spent money [and] You will probably do it. The labor market in the United States is still reasonably firm, and since energy prices are falling a little and probably some tax cuts and deregulation come, I do not think that there is an upcoming risk of recession, “said Schmieding.
“But what is becoming increasingly clear in the long run trump harms the US trend growth, that is growth in the years over 2026. And it stands for higher prices for US consumers, which in my opinion means the Fed [Federal Reserve] There is no reason to reduce interest rates with Trump as President, and Trump saw chaos and confusion, “he remarked.
CNBC contacted the White House for an answer and is waiting for an answer.
The international stock markets have been deleted in their foundations in the past few weeks because Trump intended to revive a global trade war after he had announced hard imported in import duties for goods from China, Mexico and Canada.
There are confusion and uncertainty when the president announced last Friday that some tariffs for the neighbors' neighbors and the closest trading partners would give exhaustion and delay on April 2.
Trump's unconventional approach to commercial and international diplomacy made the markets unimpressed, and US indices for whipsawing, while Stratege warned that the negative market mood in Trump 2.0 -Fära would continue. The US stocks were found on Monday morning, which indicates another rocky trip for American markets at the beginning of the new trade week.
Business leaders and economists have expressed concerns that the tariffs will lead to further inflationary pressure on the United States, with consumers probably wearing the main load of higher prices for imported goods.
They also warn that investments, jobs and growth could suffer because consumers tighten their belts and wait for a time of economic unpredictability and potential “stagflation”, which are shaped by high inflation and high unemployment.
This would exert pressure on the Fed to keep interest rates in the queue, instead of reducing its current benchmark rate in an area between 4.25%-4.5%to stimulate the economy. Lower interest rates can be more expenses and inflation.
The chairman of the FEDS, Jerome Powell, said on Friday that the central bank could wait to see how Trump's aggressive political actions have an effect before moving back to interest rates.
“A time of transition”
The latest economic data that has the confidence of the consumer in February will be a food for the thoughts for Trump for the Trump administration. The GDPnow tracker of the Federal Reserve Bank of Atlanta also stated in the past week that the US gross domestic product could shrink by 2.4% for the period between January and March. A technical recession is defined as if at least two consecutive quarters are log -negative growth.
The job data of the past week also showed that the US labor market is still expanding, but also the signs of weakness could start to assess. Long-term wage and salary billing data showed that the growth of the employment relationship in February was weaker than expected, and although the growth of jobs is still stable, the data in the middle of Trump's efforts to reduce the federal workers are.
The non -agricultural salary statements increased by 151,000 a month by one seasonally adjusted 151,000 and exceeded the downward revised January, but under the consensus forecast of 170,000 by Dow Jones, the Bureau of Labor Statistics reported on Friday. The unemployment rate increased to 4.1%.
The head of TS Lombard's US economist, Steven Blitz, said the latest job data “tell us that the economy continues to grow” and did not signal “increase risks of recession that were created by the selection of Trump's policy”.
In a note on Friday, however, he said that “the sum of Trump's actions can distort the economy in every respect, including an implosion of capital expenditure”.
“Remember that president is known to accept swings in the first year of their presidency. It is a free pass, they accuse the previous president and take up recovery. My basic process is still growth and the FED -HOLDING.
US President Donald Trump goes on the way to Florida, Washington, DC, USA, on March 7, 2025 when he goes on board Marine One.
Evelyn Hockstein | Reuters
Trump refused to rule out the possibility of a recession this year, but this weekend insisted that the economy was in a “transition phase”.
The warning by the Atlanta Fed was asked to warn an economic contraction in the “Sunday morning -futures” by Fox News Channel and seemed to be recognized that his tariff plans could influence the growth of the United States.
“I hate to predict such things,” he said on Sunday in an interview when he was asked whether the recession warning was a problem.
“There is a time of transition because what we do is very large. We bring prosperity back to America. It's a big deal.” The guide of the White House added: “It takes a little. It takes a little.”
The US Market Intelligence Unit from JPmorgan found last week that the US economy occurred in view of the unpredictable nature of tariffs “a further time of uncertainty”. The analysts said that they had a “bearish” position on US shares and expected the markets to have more volatility and potentially “crater” for US growth.
“We have already seen the negative effects that political/trade uncertainty had both budget and corporate expenses. So it is likely that we will see a greater extent in the next month. Keep in mind the unemployment rate, layoffs, warning notification, etc.
While a US recession was not the base case scenario of the bank, JPMorgan analysts warned that “the undetermined length of the tariffs and the potential of the trade war to see an acceleration in new tariffs [means] We believe that shares are questioned because estimates of the US BIP growth are reduced. “
“In view of the lack of potential ending of this escalation, the expectation that tariffs of this size immerse both Canada and Mexico in a recession. Look for GDP growth growth for craters and for profit revision to be materially lower, and force the prediction of the year.
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