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Trumponomics

Is a Trump Recession on the Way?

Mar 5, 2025
Anna Wong, Chief US economist for Bloomberg Economics, and Kathryn Holston, Economist at Evercore ISI Research, delve into the looming question of a Trump recession. They dissect the economic shifts caused by government layoffs, tariffs, and trade policy uncertainty, moving from initial growth expectations to concerns over contraction. The duo explores the implications of tariffs on inflation and how policy uncertainty affects job growth. With insights drawn from their impressive backgrounds, they provide a thought-provoking analysis of today's economic landscape.
26:55

Podcast summary created with Snipd AI

Quick takeaways

  • The proposed tariffs could significantly elevate core PCE inflation and negatively impact payroll employment growth, raising recession concerns.
  • Current economic uncertainty is at unprecedented levels, leading to reduced consumer spending and hesitance among businesses to hire.

Deep dives

Impact of Tariffs on Inflation and Employment

The discussion highlights the potential repercussions of proposed tariffs, particularly a 25% tariff on Canada, Mexico, and a 20% tariff on China. Experts predict that these tariffs could lead to a significant rise in core PCE inflation, estimated to be around 50 basis points in 2025 and an additional 20 basis points in 2026. Additionally, there is concern that these tariff increases could negatively affect payroll employment growth by around 70,000 jobs in the near term. The combination of direct tariff impacts and heightened trade policy uncertainty poses a substantial challenge to the U.S. economy's growth.

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