US Treasury Secretary Scott Bessent downplays concerns about recession amid President Trump’s tariffs, focusing on the long-term benefits for the economy. However, economists warn that prolonged tariffs could fuel higher inflation and slower growth, leading to stagflation.
The S&P 500 lost $5 trillion in value in three weeks due to tariff threats, but Bessent remains unfazed. He claims the economy was always going to undergo a transition, which some see as a euphemism for recession. Meanwhile, consumer sentiment has declined 11% this month, the third straight drop, and economists suspect inflation could rise again once tariffs take effect.
Investors worry that prolonged tariffs will fuel higher inflation while weighing on economic growth, leading to stagflation. JPMorgan economists predict slower growth and higher inflation resulting from Trump’s tariffs, while former Treasury Secretary Larry Summers puts the odds of a recession near 50%.
Trump’s administration claims to be focused on the long-term, but experts remain skeptical. The president himself did not rule out a recession, saying there would be a “period of transition.” As global markets continue to face uncertainty, economists urge caution and caution that prolonged tariffs could have severe economic consequences.
Source: https://fortune.com/2025/03/14/scott-bessent-economy-detoxing-recession-market-volatility