White House pushes back on recession fears as Trump’s trade policies raise uncertainty; Hassett calls slowdown ‘temporary’

US: The White House pushed back against recession fears on Monday as concerns over trade tariffs shook the US stock market. Kevin Hassett, director of the National Economic Council, said there were many reasons to be optimistic about the economy despite concerns about inflation and forecasts of a GDP decline in the first quarter.

He pointed to the US tax cuts as a driver of economic growth and argued that US President Trump’s tariffs on Canada, Mexico, and China were already creating jobs and boosting manufacturing in the US.

According to The Straits Times, his comments came as a Reuters poll showed that 91% of economists believe recession risks have increased due to US President Trump’s rapidly shifting trade policies.

Mr Hassett and other White House officials have also repeatedly criticised the state of the economy under former President Joe Biden. However, when US President Trump took office, GDP growth had been above trend for two years, consumer spending was strong, and unemployment remained near historic lows.

Since then, signs of a slowdown have emerged. A survey released on Monday showed more American households “expressed more pessimism” about their finances. Early data also suggests the economy could shrink in the first quarter, but Mr Hassett dismissed the concerns, calling it a “very temporary phenomenon.”

The US President declined to predict if the country could face a recession when asked in a Fox News interview on Sunday. On Monday, Goldman Sachs economists lowered their US growth forecast for the year and raised their inflation outlook.

Asian markets, including Singapore, have also declined amid tariff and recession fears. On Tuesday at 1:02 pm SGT, Singapore’s Straits Times Index (STI) fell 2% to 3,822.55, following broader losses across Asia. /TISG

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