Source: Golden Hour Data

U.S. President Trump refused to rule out the possibility that the U.S. economy will shrink and enter a recession this year, saying his comprehensive economic agenda could cause short-term turmoil, but he believes it will drive future prosperity.

After interviewing Fox News' Sunday Morning Futures, Trump was asked whether he expected a recession this year, he replied: "I hate predicting something like this. There is a transition period because we are doing very big. We are bringing wealth back to the United States, which is a big deal." Trump has begun to overhaul the U.S. economy, with a focus on new tariffs, restrictions on immigration, cut regulations, jobs and taxes. He also hopes to cut spending on some federal programs. While many businesses welcome his broader agenda, the uncertainty over the imposition of tariffs from close trading partners Mexico and Canada has disturbed the market. His tariff claims have been capricious over the past few months.

The US economy is currently growing strongly and the unemployment rate is low, and Trump's moves are testing the resilience of the US economy. Some early signs of tension have emerged, with falling consumer spending and concerns about inflation putting pressure on businesses.

At the end of 2024, U.S. stock markets rose due to investors' enthusiasm for Trump's agenda, but have gradually lost momentum in recent weeks. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite closed last Friday below the level when Trump took office on January 20. U.S. stocks have fallen more than 6% since their peak on February 19. Investors have been facing a situation where the S&P 500 fluctuates by at least 1% during trading periods for seven consecutive days, and technology stocks such as Nvidia and Tesla have fallen sharply.

Trump suspended tariffs of 25 on most cars and parts transiting from Mexico and Canada last week, indicating that his trade agenda has been on the way.

In an interview aired last Sunday, Trump expressed his denial when asked whether he could provide assurances to businesses seeking clearer tariffs. "You know, tariffs may increase over time," he said.

Trump often boasts about stock market performance during his first term, but now downplays the importance of stock markets to his second term agenda.

"Listen, what I want to do is build a strong one. You can't really look at the stock market," he said.

U.S. Treasury Secretary Becent also said last week that the U.S. economy may experience a difficult period during this economic transformation. "The market and the economy are already addicted, we are already addicted to spending, and this will be a period of addiction," Becent said in CNBC's Squawk Box program.

Trump has admitted to the turmoil caused by tariffs in recent days. "There may be some interference, a little interference," he said last Friday.In a speech to Congress on Tuesday, Trump defended his agenda, while also pointing out that there could be some interference.

Data released last week showed that the United States continued to create jobs at a steady pace in February. But economists believe there are signs that jobs may weaken in the coming months due to uncertainty over layoffs, reduced funds, tariffs and immigration restrictions.

The severely divided Congress also faces the deadline to approve more funds on Friday to avoid a shutdown, adding new variables to the economic outlook.

Communication Minister Lutnik ruled out the possibility of a shrinking economy in his televised speech last Sunday. "The United States will not experience an economic recession. The U.S. economy has never fallen into a recession since the pandemic began in 2020."