It was part of another chaotic week at the White House. Trump on Sunday kickstarted a Wall Street sell-off when in an interview he refused to rule out a recession if that’s what it takes to enact his economic agenda.
"The Trump administration seems a little more accepting of the idea that they're OK with the market falling, and they're potentially even OK with a recession in order to exact their broader goals," Ross Mayfield, investment strategist at Baird in Louisville, Kentucky, told Reuters.
By Monday, the White House was backpedaling. "There are a lot of reasons to be extremely bullish about the economy going forward. But for sure, this quarter, there are some blips in the data," said Kevin Hassett, a top economic adviser to Trump.
Wall Street ignored the administration’s attempt to calm the furor. When the markets closed on Monday, the sell-off had wiped out $4 trillion from the S&P 500’s peak last month when optimism over Trump’s agenda abounded. Perhaps more than a “blip” in the data. Social media was littered with charts showing the market’s tumble since Trump took office.
For the White House, even the good news contained some bad news. A better-than-expected inflation report was marred by fears that tariffs will drive prices up. And even if some Trump advisers believe that a short-term “detox” is necessary to reboot the economy in line with their vision, the outcome of that could be volatile and difficult to manage.
Meanwhile, Europe and other trading partners slapped retaliatory tariffs on U.S. goods as Trump’s policies escalated. The European Commission said it would impose counter tariffs on up to 26 billion euros ($28 billion) worth of U.S. goods next month.
If all of that calls for a stiff drink (and a flow chart), it’s understandable. But you had better stock up on Irish whiskey or single-malt Scotch before they become the next casualties of the trade tussle. War, they say, is hell.
