U.S. Economy and Recession Concerns

Treasury Secretary Howard Lutnick insists the U.S. economy is on solid footing despite Wall Street’s recession concerns.

> “Absolutely not,” he stated on a Sunday edition of Meet the Press when asked if Americans should prepare for a downturn.

“There’s going to be no recession in America,” he continued. “It’s like the same people who thought Donald Trump wasn’t a winner a year ago. Donald Trump is a winner. He’s going to win for the American people.”

A recession is defined as two consecutive quarters of economic contraction, resulting from imbalances due to external or internal factors, or a combination of both.

> “The President is on it and he is powerful on it, and he is not going to take his foot off the gas.” These tariffs are part of a drug war. Canada and Mexico must shut down the flow of fentanyl across our border, and China must stop subsidizing production. The Trump Administration…
> — Howard Lutnick (@howardlutnick) March 9, 2025

This stance contradicts earlier comments made by the President, who did not dismiss the possibility of a recession, calling it part of a transition.

Lutnick claims that Trump’s tariff strategy will compel other countries to lower trade barriers, leading to American growth and $1.3 trillion in new investment.

“We’re going to unleash America out to the world,” he asserted, countering warnings from JPMorgan and Goldman Sachs about a tariff-induced recession. “You are going to see over the next two years the greatest set of growth coming from America.”

Though Lutnick acknowledged that tariffs may raise the cost of foreign goods, he positioned them as part of a broader strategy to reduce the deficit and lower borrowing costs.

“When you balance the budget… you drive interest rates down 150 basis points. Mortgages come smashing down. The cost of your home will come smashing down,” he claimed.

Meanwhile, crypto traders aren’t as optimistic. Bitcoin (BTC) dropped 7% on Sunday to $80,000, approaching its 2025 low.

Ether (ETH), Solana (SOL), and XRP (XRP) also followed suit, with meme coins like Dogecoin (DOGE) and Cardano (ADA) tumbling nearly 12%.

On Polymarket, bettors are increasingly preparing for a slowdown; however, the likelihood of one occurring remains low. A contract regarding the probability of a U.S. recession in 2025 now shows 41% odds, reflecting a 16% increase in recent weeks.

Meanwhile, the latest U.S. jobs report indicated the addition of 151,000 jobs in February, aligning with expectations, though the unemployment rate rose to 4.1%, and January’s job gains were revised downwards.

However, layoffs in the public sector driven by the White House’s efforts may raise these figures in the following quarter.

While the labor market’s resilience has mitigated recession fears, signs of slowing growth are appearing, with the Atlanta Fed’s GDPNow model predicting a negative 2.8% growth rate for Q1.

Another contract gives only a 3% chance of a recession occurring before May, as the first quarter concludes on March 31.