Aohui official website: US stocks plunge, US households are pessimistic, the White House insists "recession theory" is too early

Despite growing pessimism among American households about the economic outlook and a sharp drop in the U.S. stock market, the White House still insists that talk of a recession is premature. Kevin Hassett, a key economic adviser to President Donald Trump and director of the National Economic Council, on Monday (March 10) rejected the idea that a recession is caused by uncertainty over tariff policy.AUSFOREX official websiteEmphasize that the fundamentals of the U.S. economy remain strong. However, consumer surveys and stock market performance showed very different signals, highlighting the wide divide between the market and the government.

The optimistic stance of the White House

In an interview with CNBC, Hassett said that despite predictions of a possible contraction in US Quarter 1 GDP and heightened inflation concerns, there are still many reasons to be optimistic about the US economy. He pointed out that Trump's tariffs on Canada, China and Mexico have already had the desired effect, bringing manufacturing and jobs back to the US. Hassett believes that the current volatility in economic data is mainly due to the timing effect of Trump's fast-moving tariffs and the so-called "Biden legacy", and expects this trend to fade in the coming months.

Household and market pessimism

Households expressed more pessimism about their finances in the coming year in February, with unemployment, delinquency rates and credit access expectations deteriorating significantly, according to a monthly survey of consumer expectations released by the New York Fed. The share of households expecting higher unemployment in a year's time rose to its highest level since September 2023. Meanwhile, the Atlanta Fed's GDPNow model suggests the economy is likely to contract in Quarter 1 this year, largely due to an overly large drag from net trade. The data contrast sharply with the upbeat tone from the White House.

Stock market crash and recession fears

US stocks have fallen sharply on fears that Mr. Trump's capriciousness on tariffs could lead to slower economic activity and higher inflation. On Monday, the S & P 500 Index fell 2.7 per cent and the Nasdaq tumbled 4 per cent, its biggest fall since Mr. Trump took office. Dan Coatsworth, investment analyst at AJ Bell, noted that Mr. Trump was once seen as the saviour of the market, but now his tariffs are seen as a harbinger of recession. Markets are starting to revisit the possibility of a "recession", questioning whether tariffs will backfire.

summary

Although the White House insists that the talk of recession is premature and emphasizes the long-term benefits of tariff policy, the pessimism of American households and the plunge in the stock market have revealed deep concerns in the market. Consumer surveys and economic models suggest that the economy may face the risk of contraction in the short term, and the uncertainty of tariff policy further exacerbates this pressure. In the future, the direction of White House policy and its impact on the economy will continue to be the focus of market attention. If the government cannot effectively ease market concerns, the risk of economic recession may be further exacerbated.