Trump's economic policies, including tariffs and tax cuts, could lead to inflation and recession.
From Yahoo Finance: 2025-06-14 13:10:00
Former IMF official Desmond Lachman warns of inflation and recession risks due to Trump’s economic policies, including tariffs and tax cuts. Despite credible warnings from experts, Trump continues to pursue these policies, potentially reigniting inflation and pushing the US economy into recession.
Businesses have yet to see the full effects of tariffs, with inflation remaining tame. Lachman warns that the US economy is not out of the woods, as businesses stockpiled inventory in preparation for tariffs. The surge in foreign goods buying from US businesses poses additional inflationary risks.
Lachman highlights the potential impact of Trump’s tax bill on the US dollar, national debt, and budget deficit, which could lead to higher consumer prices. Foreign investors fleeing could send long-term Treasury rates soaring, affecting the US economy and stock market valuations.
Lachman cautions that with high stock market valuations and potential bond or dollar crises, stocks may not perform well. Drawing parallels to the tale of Icarus, Lachman questions if Trump’s defiance of economic warnings will eventually lead to consequences for the US economy and stock market.