Ever since Donald Trump announced that he would be going to war on trade, using tariffs to level the playing field, he has been under attack.
Both Democrats and the media have pushed the narrative that Trump is leading us right into a recession.
While inflation has ticked up a little bit, it now appears that we are moving away from a recession rather than into one.
Not only have analysts been suggesting that Trump will lead the US into a recession, but now they are blaming him for a global recession.
Just this weekend, Fortune ran a piece blaming Trump for a possible recession in the UK.
The report started, “Trump’s tariff threats—potentially up to 30% on E.U. imports—may tip Europe into recession by late 2025, some analysts say. European exporters are heavily reliant on the U.S. market, especially in autos and pharmaceuticals.
“The U.S. is the largest trading market for both the E.U. and the U.K. Stock markets remain buoyant for now, seemingly on the assumption that deals will be struck lowering the rates.”
The Consumer Price Index (CPI) is the primary measuring tick for inflation.
In June, the CPI rose 2.7% on an annual basis, which is generally a sign that we are seeing rising inflation.
This was the first rise we have seen, as the CPI had declined for most of the last year.
It was up 0.3% on a month-to-month basis, more or less falling in line with what most “experts” had predicted.
While the indicators say were are headed for higher inflation and possibly even a recession, the betting markets, which have been astonishingly accurate, say we should be okay.
The market went from 70% to 19% that the United States will fall into a recession, which is the lowest it has been in the history of the Polymarket.
Commerce Secretary Howard Lutnick stated, “Personal consumption expenditures rose 1.8 percent in the first quarter, beating forecasts for 1.2 percent. Durable goods, services, and nondurables all contributed.” Treasury Secretary Bessent agreed, stating, “There is nothing in the data that shows that we are in a recession.”
I am not leaning one way or another, as I still don’t think we are getting a proper reaction in that market to the tariffs. It will be months before we truly see the impact of the tariffs, but I also believe many people are limiting the damage by reducing unnecessary spending. The economy is usually the biggest driving force to get people to the polls, so let’s hope that Lutnick and Bessent got this one right.
