US stocks experienced a significant decline after President Donald Trump did not dismiss the possibility of the country entering a recession.
During a weekend interview with Fox News, Trump addressed a variety of challenges faced by his administration since resuming office in January.
Topics like Russia and Ukraine were naturally part of the discussion, but Trump’s imposition of tariffs also took center stage.
The president, representing the Republican Party, has implemented 25 percent tariffs on all imports from Canada and Mexico into the US, prompting these countries to respond with counter-tariffs.
These tariffs have had a significant impact, with the Federal Reserve Bank of Atlanta’s GDPNow model predicting that US GDP growth for the first quarter of 2025 will decline by -2.8 percent, a decrease from +3.9 percent just a month earlier.
This data points towards a potential recession, according to analysts, leading Fox News to ask Trump, “are you expecting a recession this year?”
President Trump replied: “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.”
When questioned about the potential for increased inflation due to the tariffs, Trump stated: “You may get it. In the meantime, guess what? Interest rates are down.”
These remarks led to a significant downturn in US stocks as a new week began, raising concerns among many in the country.
The S&P 500, for example, decreased by 1.4 percent at the start of Monday (March 10), while the Nasdaq Composite saw a notable drop of 1.95 percent.
Additionally, the S&P experienced a significant 3.1 percent decline the previous week due to the tariff measures introduced by the Trump administration.
David Bahnsen, the chief investment officer at the Bahnsen Group, provided insight to Fox about the current market volatility.
“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.”
He further commented: “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.”