is a US recession inevitable?

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As Donald Trump’s tariffs begin to sow the seeds of market uncertainty, fears of a US recession are growing.

Both the S&P 500 and the tech-focused Nasdaq Composite reached recent lows this week amid concerns from investors over the effects of the US president’s economic policies. The Wall Street sell-off sent markets in Europe and Asia tumbling in succession.

As the Vix index of volatility, often referred to as ‘Wall Street’s fear gauge’, reaches its highest level since mid-December, businesses are slashing their profit and sales forecasts.

The source of the angst is the volatility surrounding Trump’s on-again, off-again trade war, a topic Tej Parik explores in his Free Lunch column. On the consumer front, Parik writes, squeezed US households face the prospect of a $2,000 increase in expenditure if Trump’s proposed duties on Mexico, Canada and China go ahead as planned. Consumer confidence is plunging, expectations of high inflation and unemployment are rising and the threat of an all-out tariff war looms large — a cocktail Parik calls “an ominous trifecta”.

In an interview with Fox News on Sunday, Trump declined to rule out a recession following warnings from the Atlanta Federal Reserve of an economic contraction in the first quarter of the year. “I hate to predict things like that,” he said. “There is a period of transition, because what we’re doing is very big.”

So what do you think? Is Trump right to be optimistic about the economy’s prospects or is the US on an irreversible road to recession? Share your view by voting in our poll or commenting below the line.


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