TLDR
- Commerce Secretary Howard Lutnick dismisses recession fears despite market concerns
- Lutnick claims Trump’s tariff strategy will drive $1.3 trillion in new investment
- Bitcoin fell 7% to around $80,000 as crypto markets show less confidence
- Polymarket shows recession odds increasing to 41% for 2025
- Signs of slowing growth emerging with Atlanta Fed forecasting negative 2.8% Q1 growth
Commerce Secretary Howard Lutnick has firmly rejected the possibility of a U.S. recession despite growing concerns from Wall Street and falling cryptocurrency prices. In a Sunday interview on Meet the Press, Lutnick declared “there’s going to be no recession in America” while Bitcoin dropped 7% to the $80,000 range.
“It’s like the same people who thought Donald Trump wasn’t a winner a year ago. Donald Trump is a winner. He’s going to win for the American people,” Lutnick stated during the interview. His comments come as traders show increasing unease about economic conditions.
Bitcoin fell to $80,000 on Sunday, approaching its 2025 low of $78,000. The decline wasn’t limited to Bitcoin, as Ether, Solana, and XRP followed the downward trend. Meme coins were hit even harder, with Dogecoin and Cardano tumbling nearly 12%.
Lutnick’s confidence stands in contrast to President Trump’s own recent comments. When asked about a possible recession, Trump declined to give a definitive answer. “I hate to predict things like that,” the President said on Fox News.
Current situation a “period of transition”
Trump instead described the current economic situation as a “period of transition.” He explained, “what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of it takes a little time.”
The Commerce Secretary argued that Trump’s tariff strategy will force other countries to lower their trade barriers. This approach, according to Lutnick, will unleash American growth and drive $1.3 trillion in new investment over the next two years.
“We’re going to unleash America out to the world,” Lutnick said in response to warnings from major financial institutions. JPMorgan and Goldman Sachs have both issued cautions about a tariff-induced recession, which Lutnick dismissed.
Lutnick acknowledged that tariffs could make foreign goods more expensive. However, he framed this as part of a broader effort to cut the deficit and lower borrowing costs for Americans.
“When you balance the budget… you drive interest rates down 150 basis points. Mortgages come smashing down. The cost of your home will come smashing down,” he claimed. This would supposedly offset any price increases from tariffs.
Odds of a U.S. recession jump
Betting markets tell a different story than Lutnick’s rosy outlook. On Polymarket, bettors are increasingly preparing for an economic slowdown. A contract asking about the probability of a U.S. recession in 2025 has seen the “Yes” odds jump to 41%, a 16% increase in recent weeks.
The latest U.S. jobs report showed 151,000 jobs added in February, roughly in line with expectations. However, the unemployment rate ticked up to 4.1%, and January’s job gains were revised lower, suggesting some cooling in the labor market.
Layoffs in the public sector as part of the White House’s efficiency efforts may push unemployment numbers higher next quarter. This comes as the Atlanta Fed’s GDPNow model is already forecasting a negative 2.8% growth rate for the first quarter.
Plans to implement reciprocal tariffs
Tariffs stand at the center of the administration’s economic strategy. Trump has announced plans to implement reciprocal tariffs on goods from foreign countries beginning April 2. Exemptions for Canada and Mexico are set to expire on that date.
Lutnick connected these tariffs to both economic policy and border security. He told Meet the Press that tariffs on Canada and Mexico would end “if fentanyl ends,” blaming both nations for allowing the drug to flow across U.S. borders.
Trump’s tariff plans could affect grocery prices in particular. According to the Agriculture Department, imports supply 60% of fresh fruit and 38% of fresh vegetables in the United States, excluding certain crops.
While Lutnick remains bullish on the economic outlook, crypto traders and prediction markets suggest growing concerns about a potential downturn. The contrast between official optimism and market skepticism leaves Americans wondering which indicators to trust as the economy enters what the President calls a “transition” period.
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