PANews reported on April 18 that Adam Posen, a well-known economist, warned that the US economy is more likely to fall into recession and may face the biggest stagflation shock in decades due to the trade war launched by the Trump administration. Posen pointed out in a speech this week that even if Trump reaches an agreement with various countries, tariffs may exist for a long time, leading to rising prices, increased inflation and slower economic growth.
He predicts a 65% chance of a U.S. recession. Posen stressed that the Fed has cut interest rates too much and may not be able to cope with rising prices or be forced to raise interest rates quickly, putting additional pressure on the economy. He also pointed out that Trump's economic policies have increased global uncertainty and countries may unite to protect themselves from the impact of U.S. actions. Posen believes that it may take years to repair the damage.
