Why the United States Could Be Headed for a Recession
The United States stock market continues to fall, keeping up a bearish trend that has seen little reprieve over the last two weeks. This is only one indicator that the U.S. might be entering a recession soon.
The poor stock market performance lately can be mostly blamed on tariffs that the U.S. government has imposed on some of its biggest trading partners- China, Canada and Mexico. With a low stock market and continued tariff concerns, investors should consider that a recession could be on the way.
The cryptocurrency market is also down, with Bitcoin seeing some of its lowest numbers this week since November. A market that was recently very strong has seemingly lost most of its gains.
There could be hope on the horizon if the government institutes positive cryptocurrency policy and reverses its decisions on tariffs, but much of the damage has already been done. Some analysts are even proposing the theory that the government wants a recession to happen so that deregulation, tax cuts, and Fed interest rate cuts could reinvigorate the economy without the government having to spend a bunch of money.
How Likely Is a Recession?
The possibility of a recession grows with each new bit of tariff news. China has already imposed its own tariffs on goods imported from the United States, which could slow down the export business nationally.
The current Donald Trump agenda seems poised to push the U.S into a recession, and about the only way that could change is if many of Trump’s policies are reversed and soon. This is according to Charlie McElligott, a strategist for Nomura.
Trump already stated that he wants to put pressure on the Federal Reserve to make interest rate cuts happen, but they have not caved to the pressure. This could be his way of applying pressure indirectly. If so, it is a dangerous game that could easily end up with the U.S. in a state of depression.
Early indicators that Trump’s policies would help the economy were clouded by tariff fears months ago. It seems like the tariff policy has obscured much of the other economically positive actions and put the country in a place where there is very real cause for concern.
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