Economist Warns of Increased U.S. Recession Risk Amid Trade Tensions

According to PANews, renowned economist Adam Posen has issued a warning about the heightened risk of a U.S. economic recession due to the trade war initiated by U.S. President Donald Trump's administration. Posen highlighted that the country might face its most significant stagflation shock in decades. During his speech this week, he noted that even if Trump reaches agreements with other nations, tariffs could persist long-term, leading to price hikes, increased inflation, and slowed economic growth. Posen estimates a 65% likelihood of the U.S. entering a recession. He emphasized that the Federal Reserve has excessively lowered interest rates and may struggle to manage rising prices, potentially being forced to rapidly increase rates, adding further pressure to the economy. Additionally, Posen pointed out that Trump's economic policies have heightened global uncertainty, prompting countries to unite in protecting themselves from U.S. actions. He believes that repairing these damages could take several years.