When to Take a Recession?
Author: Greg Valliere
March 10, 2025
DONALD TRUMP RAISED EYEBROWS THIS PAST WEEKEND by refusing to rule out a recession this year, and the evidence — a clear softening of the economy — is compelling. The closely watched Atlanta Fed “GDP Now’ forecast has plunged to 2.4% for this quarter.
TIMING THE RECOVERY: We have talked recently with Washington insiders who think Trump wouldn’t mind a recession this year — to get it out of the way ahead of the next elections, in 2026.
THERE ARE SEVERAL REASONS why a recession actually could help Trump:
* He could boast if a recovery comes by early next year.
* He could have a scapegoat if tariffs plunge Canada and other countries into recession.
* He could blame persistent budget deficits on a recession and its accompanying revenue slump.
* He could have a rationale for a big tax cut later this year, claiming that it would pull the economy out of a slowdown.
TWO CONSECUTIVE QUARTERS of negative GDP growth are sufficient to proclaim a recession, and the Democrats — desperate for an issue — may have one. especially if there’s budget gridlock starting this coming weekend.
EVEN IF THERE’S NO RECESSION — and there may not be one — Trump can take credit late this year for avoiding one. It’s a win-win for the president, who has cleverly set the stage for a recession that, he will argue, only he can avoid.
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