The US is approaching a critical juncture in its economic trajectory, according to Carmen Reinhart, a Harvard professor and former chief economist at The World Bank. She warns that the country’s increasing volatility in markets, financial instability, and higher interest rates pose higher-than-average recession risks.
Reinhart attributes these concerns primarily to unpredictable market frameworks, citing policy uncertainty from various angles, including tariffs, President Trump’s attacks on the Federal Reserve, and geopolitical tensions. The shift away from globalization under President Trump’s immigration policies and efforts to bring manufacturing back home may further slow population growth and economic expansion, potentially leading to a recession.
Reinhart emphasizes that this trend is unlikely to reverse, highlighting the importance of global cooperation over fragmentation. She advises investors and workers to adopt medium-term to longer-term investment plans, emphasizing hedging across operations to protect their bottom lines. With rising national debt and ongoing fiscal policies posing significant risks, it is essential for all Americans to stay informed about these developments and prepare for potential economic changes.
Source: https://www.cnbc.com/2025/08/04/changing-fiscal-and-immigration-policies-may-push-recession-reinhart.html