Trump ‘A chaos and confusion agent, economists warn

Global market volatility and geopolitical turbulence following the return of President Donald Trump to the White House have led to warnings that the economy of the United States could go to a recession – But economists say that a recession is not yet in letters.

“I do not think we are talking about a recession of the United States. The US economy is resistant, I would say that, in large part despite Donald Trump,” Holger Schmieding, head economist of Berenberg Bank, said on Monday, on Monday to the “CNBC Squawk Europe.”

Folding Trump a “chaos and confusion agent,” Schmieding said that “Zigzagueo’s Zigzagueo in rates shows that she has little idea of ​​the possible consequences of her tariff policies.”

However, “US consumers have money to spend, (and) will probably do it. The labor market in the United States is still reasonably firm, and with energy prices a bit and probably some tax cuts and deregulation, I do not think there is a risk of imminent recession,” according to Schmieding.

“But what is becoming increasingly clear in the long term, Trump is harming the growth of the trends of the United States, that is, growth in the years beyond 2026. and represents higher prices for US consumers, which means, in my opinion, the Fed (Federal Reserve) has no motifs to reduce the rates with Trump as president, and Trump sow chaos and confusion,” he said.

CNBC has contacted the White House to obtain an answer and is waiting for an answer.

International stock markets have shaken their bases in recent weeks amid fears that Trump intends to revive a global commercial war after announcing blunt import tariffs on the goods of China, Mexico and Canada.

Confusion and uncertainty have continued, since the president last Friday announced that there would be a respite and delay April 2 in some tariffs on the neighbors of the United States and the closest commercial partners.

Trump’s unconventional approach for international trade and diplomacy has not left the markets not impressed, with US indices. The strategists warned that the negative feeling of the market will surely continue in the Trump 2.0 era. Futures of US shares. UU. They fell on Monday morning, indicating another rock trip for US markets at the beginning of the new negotiation week.

Business leaders and economists have expressed concern that tariffs will lead to new inflationary pressures on the US, with consumers who probably assume the worst part of the highest prices in imported goods.

They also warn that investment, employment and growth could suffer, since consumers press their belts and bend down to expect an economic unpredictability period and Potential “stagflation” marked by high inflation and high unemployment.

That would exert pressure on the Fed to keep interest rates on hold, Instead of cutting from its current reference rate in a range between 4.25%-4.5%in an attempt to stimulate the economy. Lower interest rates can feed more expenses and, in turn, inflation.

The president of the Fed, Jerome Powell, said Friday that the Central Bank can wait to see how Trump’s aggressive political actions take place before it moves again in interest rates.

Recent economic data that show Consumer confidence has received a success In February there will be a food to think for the Trump administration. The Atlanta Federal Reserve Bank Chorlea The incoming metric tracker last week that the Gross Domestic Product of the United States could be reduced by 2.4% for the period between January and March. A technical recession is defined as it takes place when at least two consecutive quarters record a negative growth.

Last week’s job data also showed that, although the US labor market is still expanding, the signs of weakness could also begin to advance. Non -agricultural payroll data indicated that employment growth was weaker than expected in February, although still stable despite Trump’s efforts to reduce federal workforce.

Non -agricultural payrolls increased by 151,000 seasonally adjusted in the month, exceeding the 125,000 reviewed on January, but arriving below the consensus prognosis of 170,000 Dow Jones, the labor statistics office of the Labor Department reported Friday. The unemployment rate obtained more than 4.1%.

The American chief economist of TS Lombard, Steven Blitz, said that the latest job data “tell us that the economy continues to grow” and did not point out “an increase in recession risks created by the variety of Trump policies.”

In a note on Friday, he said: “The sum of Trump’s actions can still skew the economy in any way, including an implosion of capital spending.”

“Keep in mind that it is known that the presidents accept recessions in the first year of their presidency. It is a free pass, they blame the previous president and the credit for recovery is attributed. My base case remains the growth and participation of the Fed.

Trump has refused to rule out the possibility of a recession this year, but insisted this weekend that the economy was in a “transition period.”

He was asked about the warning of Atlanta’s Fed of an economic contraction By Fox News Channel “Sunday Morning Futures“Trump seemed to recognize that his rate plans could affect the growth of the United States.

“I hate to predict things like that,” he said In an interview broadcast on SundayWhen asked if the recession warning was a concern.

“There is a transition period because what we are doing is very large. We are bringing wealth to the United States. That is a big thing.” The White House leader added: “You need a little time. It takes a little time.”

The United States Market Intelligence Unit of JPMorgan pointed out last week that the US economy was entering “another period of uncertainty” given the unpredictable nature of tariffs. The analysts said they were taking a “bassist” position in US actions, Waiting for markets to see more volatility and that the growth of the United States potentially “crater”.

“We have already seen the negative impact that the uncertainty of the policy/commercial has had on domestic and corporate spending, so it seems likely to see a greater magnitude of this during the next month. It is attentive to the unemployment rate, layoffs, warning notices, etc. If we begin to see the unemployment rate increased rapidly, then it is probable that the market is likely Novage

Although a recession of the United States was not the scenario of the Bank Base case, JPMorgan analysts warned that “the indeterminate length of tariffs and the potential of the commercial war to see an acceleration in the new tariffs (means) we believe that the stocks will be challenged as the growth estimates of the United States GDP.”

“Given the lack of a potential end for this escalation, the expectation is that the tariffs of this magnitude with promoting Canada and Mexico to a recession. Look for the GDP growth expectations of the US They noted.