U.S. Economists Warn of Elevated Recession Risks Amid Trump Policies

Experts warn that the U.S. economy faces heightened risks of recession, with probabilities now estimated as high as 50%, influenced largely by President Trump's proposed tariffs and his administration's economic policies. Jeffrey Frankel from Harvard expressed that the imposition of new tariffs, particularly on Canada and Mexico, could severely impact the U.S. auto industry and lead to stagflation. Cathie Wood of ARK Invest highlighted the slowing velocity of money as a sign of reduced consumer and business spending, suggesting that the administration may be underestimating the economic fallout from these trade policies. The UCLA Anderson Forecast has issued its first 'recession watch', indicating that Trump's policies may provoke economic contraction in the near term, despite current indicators not showing immediate recession signs. Additionally, forecasts from economists indicate varying probabilities for a recession, with estimates around 20-36% in the upcoming year, contingent on trade dynamics. Overall, economic uncertainty is mounting, and the potential for a downturn remains a significant concern for businesses and consumers alike.