US stocks drop after Donald Trump gives worrying answer when asked about a recession
Topics: Donald Trump, Money, US News, Politics
Callum Jones
Featured Image Credit: Carl Court - Pool/Getty Images
Topics: Donald Trump, Money, US News, Politics
Stocks in the US have suffered a sharp drop after President Donald Trump refused to rule out the country going into a recession.
Trump sat down with Fox News over the weekend to speak about numerous issues that have faced his administration since he returned to the White House in January.
Of course, Russia and Ukraine were high on the agenda, but tariffs introduced by Trump was also a topic of discussion.
The Republican president has sanctioned both Canada and Mexico with 25 percent tariffs on all imports into the US, which has led to counter-tariffs from the neighboring countries.
Advert
The impact of these tariffs have been big, with the Federal Reserve Bank of Atlanta's GDPNow model anticipating that GDP growth for the first quarter of 2025 in the US will fall by -2.8 percent - down from +3.9 percent just a month ago.
Such stats provide a recipe for a recession, according to experts - so Trump was asked 'are you expecting a recession this year?' by Fox News.
The president responded: "I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.
"That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us."
Trump was then asked if he believes the tariffs introduced would heighten inflation, to which he replied: "You may get it. In the meantime, guess what? Interest rates are down."
Such comments have seen US stocks dramatically heading into a new week, causing concern amongst many Americans.
The broader S&P 500 fell by 1.4 percent heading into Monday (March 10), for example, while Nasdaq Composite dropped a considerable 1.95 percent.
Meanwhile, we saw S&P drop by a massive 3.1 percent last week, amid the changes being introduced by the Trump administration regarding tariffs.
David Bahnsen, who is the chief investment officer at the Bahnsen Group, explained to Fox why the markets are all over the place right now.
"The talk of tariffs is, in a lot of ways, worse than the implementation of them," he told the outlet. "The tariff talk, reversal, speculation, and chaos only fosters uncertainty."
The money expert added: "I do not believe the administration knows how the tariff situation will play out, but if I were a betting man I would say that it will persist long enough to do damage to economic activity for at least a quarter or two, and ultimately result in a deal with different countries that make everyone wonder why we went through all the fuss."