United States Treasury Secretary Scott Bessent stated that the underlying economy of the country is healthy and the US currently has no reason for a recession, but at the same time rejected the idea that the downturn cannot be.
During a conversation with media representatives on Tuesday, March 18, Mr. Bessent stated that he could not guarantee anything. The relevant statement was made in the context of assessing all the likely prospects for a change in the situation in the United States economic system. Scott Bessent also rejected questions about guarantees that the US economy would not face a recession scenario. He described the relevant questions as silly.
At the same time, as noted by the media, economists warn that a recession as a state of affairs that could potentially be realized in the foreseeable future is a realistic prospect for Washington. In the context of the relevant preliminary forecasting, it is assumed that in this case, uncertainty related to the tariff policy of the administration of the President of the United States, Donald Trump is a factor impacting the risk’s vision of what can happen and what currently does not belong to a kind of impossible category. Experts fear the negative consequences of increased levies on imported goods for the situation in the space of the US economic system. It is worth noting that even before Donald Trump decided to tighten Washington’s trade policy measures, warnings were circulating that appropriate actions could provoke an accelerated growth in inflation in the United States.
Scott Bessent stated that he can guarantee that the US has no reason for a recession. In the relevant context, he also noted very good underlying data. In this case, it meant the figures from credit cards and banks.
Scott Bessent also stated that there may be a pause as the economy transitions from relying on government spending. He said that the administration of Donald Trump is going to take the mentioned spending under control. It was also noted that the United States authorities plan to bring manufacturing back home and make the country more affordable for working Americans.
Moreover, Mr. Bessent stated that he had not seen the numbers regarding the reciprocal tariffs, which are expected to be announced on April 2. According to him, the relevant process will provide that each of Washington’s trading partners will get assigned a particular duty. He stated that on April 2, each country will receive a number, which, according to Washington, represents its tariffs. It was also separately noted that for some countries the mentioned indicator may be quite low. At the same time, other countries will face quite a high number.
Scott Bessent expressed optimism that in some cases the country can avoid reciprocal tariffs because a deal is pre-negotiated. He also stated that other trading partners of the United States may seek to negotiate a reduction in duties after they receive their number.
Moreover, the Treasury secretary, noted that his department is working with Congress on legislation to further restrict outbound investment into China. Last year, the administration of former United States President Joe Biden issued an executive order that required screening and reporting on some financial injections by the US into the mentioned Asian country. At the same time, on Capitol Hill, some policymakers who adhere to the so-called hawkish position are pushing for the Treasury to do more.
Scott Bessent stated that his department will make sure that the United States outbound investment does not turn around and get used against the US. He noted the intention to continue investigating this and where necessary block it.
Returning to the topic of recession risk, it is worth mentioning that last week Wall Street saw a downturn in both financial indicators and sentiment after Donald Trump announced that he would not rule out the likelihood of the implementation of the corresponding scenario. The US president also noted that Americans should expect a period of transition across the economy. Since then, representatives of the Donald Trump administration have begun making statements aimed at stopping the spread of panic among investors.
Last weekend, United States Commerce Secretary Howard Lutnick, during a conversation with media representatives, said that Mr. Trump is bringing growth to America, and noted that he would never bet on a recession.
Recession continues to be a possibility and is not yet something that belongs to such a definition as a materialized scenario. At the same time, fears that this state of affairs will become a reality are intensifying, especially against the backdrop of a heated back-and-forth over Donald Trump’s tariff threats and several new tariffs that have already entered into force.
Former United States Treasury Secretary Larry Summers, who served under the Bill Clinton administration, said last week during a conversation with media representatives that, in his opinion, the probability of a recession scenario in the space of the US economic system is about 50%. At the same time, he noted that the corresponding risk is rising every day. During a conversation with media representatives at the current week, Larry Summers underlined that his opinion has not changed, despite the improvement in the situation on the markets. In the corresponding context, he stated that the huge sense of policy uncertainty and the chilled spending continue to be relevant circumstances.
JPMorgan Chase analysts in their note wrote about a 40% probability that a recession scenario will occur in the United States economic system. It is worth noting that at the beginning of 2025, they estimated the corresponding likelihood at 30%. The change in the vision of the realism of the risk of recession in the United States by analysts of the mentioned financial institution is associated with ramped-up tariffs. In their opinion, the relevant factor can put a substantial drag on business activity. They also argue that it is the increased tariffs that can throw the United States economy and the global economy into recession.
The results of special surveys indicate that businesses are delaying investments and seeing a decrease in revenue. This is because consumers put off purchases, including due to tariffs.
Consumer spending, which accounts for more than two-thirds of the gross domestic product (GDP) of the United States, seems to be becoming less and less sturdy. Moreover, the mentioned spending in the US is showing a decline, the pace of which exceeds the preliminary expectations of experts.
The risk of a recession scenario in the United States economic system is still below the level of concern about this issue. At the same time, in this case, concerns are related to specific indicators, not abstract assumptions.
As we have reported earlier, US Budget Deficit Increases.
