Table of Contents
- Economic Recession Probability Increases
- Trump Administration Maintains Optimism on Recession Concerns
- Technology Stocks and Cryptocurrency Market Plummet
Economic Recession Probability Increases
According to a report by The Wall Street Journal, analysts at the firm believe that “extreme U.S. policies” may lead to an increased risk of economic recession. Meanwhile, Goldman Sachs has also raised its probability of a U.S. recession within the next 12 months from 15% to 20%, stating that if the Trump administration continues its current policies, the risk of recession may further increase even if economic data worsens. At the same time, economists at Morgan Stanley have downgraded their forecast for U.S. economic growth and raised inflation expectations. The firm anticipates that the GDP growth rate will decline to 1.5% in 2025 and further slow to 1.2% in 2026.
Trump Administration Maintains Optimism on Recession Concerns
Despite the gloomy market sentiment, U.S. President Donald Trump does not appear to be worried about potential economic recession issues. Kevin Hassett, Chairman of the White House National Economic Council (NEC), stated in an interview with CNBC on March 10 that there are still many reasons for optimism regarding the U.S. economy. He pointed out: “There are many strong reasons for economic growth in the future, despite some volatility in short-term data.” Additionally, when Trump was asked about the possibility of recession during an interview with Fox News on March 9, he responded that the U.S. economy is in a “transitional period.” According to a previous report by Zombit, some analysts believe that pushing the U.S. into an economic recession is actually Trump’s goal, aiming to prompt the Federal Reserve to cut interest rates, leading to a rebirth after a period of demise.
Technology Stocks and Cryptocurrency Market Plummet
The stock market rebound, referred to as the “Trump bump,” has nearly completely retraced. The S&P 500 index has now fallen below the level it was at before Trump’s victory on November 5, 2024. The S&P 500 index has dropped nearly 10% from last month’s peak, while the Nasdaq index has entered correction territory, falling 14% in three weeks. Meanwhile, the cryptocurrency market has also faced a severe setback, with a total market capitalization dropping 7.5% to $2.6 trillion on March 11, resulting in an outflow of approximately $240 billion in a single day. Bitcoin (BTC) also fell below its previous support level, dropping 4% that day and briefly touching $76,784. The prediction market Polymarket leveraged this to promote on X, stating, “The probability of recession is now the most attractive chart in the financial market.”
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