US Economy: Experts Divided on Recession Possibility

Concerns about a potential recession are intensifying following a turbulent day in the stock market and impending tariffs on imported goods.

MINNEAPOLIS — This week marks a crucial juncture for the U.S. economy.

New tariffs imposed by President Trump on Wednesday will affect various imported goods, while lawmakers are racing against a deadline to prevent a government shutdown set for Friday.

Economists are sounding alarms about a recession, citing substantial cuts in government jobs and ongoing inflationary pressures. President Trump has also acknowledged the possibility of an economic downturn.

Despite the buzz around recession fears, experts urge caution. University of Saint Thomas economics professor Tyler Schipper notes that proposed tariffs and recent policy shifts are generating considerable uncertainty, which tends to unsettle both companies and the stock market.

“There is some recognition within the White House right now that some of the policies they’re implementing could have negative effects on growth in the short term,” Schipper stated.

Goldman Sachs shares these concerns, recently increasing the odds of a recession within the next year from 15% to 20%. Similarly, Yardeni Research has raised its estimates, now placing the likelihood at 35%.

Consumer sentiment is also shifting. The University of Michigan’s Consumer Sentiment Index shows rising concerns about the economic outlook, although it is notable that consumer anxiety was more pronounced during the peak of inflation three years ago without leading to a recession.

Meanwhile, Federal Reserve Chairman Jerome Powell asserted last Friday that “despite elevated levels of uncertainty, the U.S. economy continues to be in a good place.”

Treasury Secretary Scott Bessent commented on the situation, indicating, “We’ve become addicted to this government spending, and there’s going to be a detox period.”

Schipper remains cautious, suggesting that while economic conditions merit attention, there is no immediate cause for alarm.

“I think it’s too soon to be worried, but it’s one of those times where my ears start to perk up,” he said. “Right now, it’s not a five-alarm fire.”