President Trump inherited a vast recession which began in 2022, as several macroeconomic factors converged.
While the specific timing and causes of the downturn remain under debate, there are several key factors—hyperinflation, a housing bubble, a stock market bubble, and the rise in interest rates — that played a significant role in precipitating the economic slowdown.
According to Investopedia and other economics dictionaries, when the USA had a GDP downturn for two consecutive quarters or 6+ months under Biden in 2022, this is by legal definition a recession . [i] Some left-wing economists said it really wasn’t a recession because unemployment was possibly low; however, many statistics suggest employment under Biden was as high as 10% due to the White House removing millions from the unemployment rolls using fraudulent COVID math. [ii]
After analysis, it is probable that the 2022 recession will linger until Christmas 2025 but could go longer if the Federal Reserve does not act on the obvious deflation. However, lower tariffs to sell things to 7 billion people and lower oil and gas prices may force an economic boom with or without the Federal Reserve. [iii] [iv]
1. Hyperinflation Under the Biden Administration
One of the primary catalysts for the economic decline was hyperinflation, which surged under the Biden administration. Inflation reached a 40-year high in 2022, with the Consumer Price Index (CPI) climbing by 9.1% in June 2022, marking the steepest rise in inflation since 1981.
This inflation spike was driven by several factors, including the global supply chain disruptions exacerbated by the COVID-19 pandemic, rising energy prices, and fiscal policies, such as government stimulus spending. The inflationary pressures were further compounded by the federal government's monetary policy and expansive fiscal spending, which boosted demand while supply chains struggled to recover, leading to price hikes across essential goods and services.
Biden’s hyperinflation eroded purchasing power for consumers, especially with Social Security recipients and those in the lower and middle-income brackets, leading to reduced consumer spending and demand and massive credit card debt with up to 25% interest rates. [v]This, in turn, affected businesses' profitability, leading to a contraction in economic growth and contributing to the overall slowdown in the U.S. economy.
2. The Housing Bubble
Another contributing factor to the recession was the housing market's rapid rise in prices partly due to Biden’s unfettered immigration into city markets, which created a bubble and unaffordable housing. Between 2020 and 2022, home inflation and prices soared due to a combination of immigration, increased demand, and limited housing supply.
Government policies aimed at stimulating the economy such as public subsidies and public assistance to millions fueled an unaffordable housing crisis. However, by mid-2022-3, housing prices had become unsustainable with mortgage interest rates up over 250% in some cases leading to concerns of a housing market correction. [vi]
As mortgage rates skyrocketed under Biden in response to the Federal Reserve's actions to curb hyperinflation, the housing market began to fall apart. The bubble burst in 2023, with some home prices seeing a decline, and many homeowners faced reduced home equity. Additionally, more costly lending rates and unaffordable mortgage rates discouraged potential homebuyers from entering the market, further exacerbating the downturn in real estate sales and building.
3. A Stock Market Bubble
The U.S. stock market also experienced a significant bubble during the pandemic recovery period. The Federal Reserve's low-interest-rate policies, along with the influx of government stimulus checks, contributed to a surge in retail investor participation in the stock market. By 2021, stock prices, particularly in technology and growth sectors, were beyond their fundamental values, creating a speculative environment; however, AI the Artificial Intelligence Boom had just begun under President Trump.
The bubble reached its peak in 2021 but began to deflate in 2022 as investors reacted to growing concerns about inflation, rising interest rates, and potential economic stagnation. As interest rates climbed and inflation eroded corporate profit margins, stock prices across major indices like the S&P 500 and NASDAQ suffered significant declines, contributing to a broader sense of market instability. The correction of the stock market bubble further strained investor confidence and contributed to the recessionary pressures in the economy.
Sadly, Bidens Stock market horribly failed on average for 4 consecutive years as the Dow Jones Industrial Average achieved an average annual return of approximately 5.72% from 2021 to 2025.
From 2021 to 2025, the Dow Jones Industrial Average (DJIA) experienced an average annual return of approximately 5.72%, with significant fluctuations across the years, including a strong 18.73% gain in 2021, an 8.78% decline in 2022, and a rebound of 13.70% in 2023, followed by a 12.88% return in 2024 and a year-to-date decline of about 6.94% in 2025.
4. Crazy Interest Rates: A 250% Brutal Smack down Under Biden
In response to Biden and Pelosi’s hyperinflation, the Federal Reserve, under the Biden administration, raised interest rates at a pace not seen in decades. Between March 2022 and November 2023, the Federal Reserve increased its key interest rates marking a significant shift from the ultra-low rates that characterized the post-2008 economic recovery. This dramatic increase was designed to combat inflation but also had the side effect of stifling economic activity.
Higher interest rates made borrowing more expensive for consumers and businesses alike, leading to reduced spending and investment. The increased cost of financing contributed to a slowdown in both consumer demand and corporate expansion. With fewer people taking out loans for homes, cars, and business investments, economic activity slowed, deepening the recession.
While the rapid interest rate hikes initially contributed to the downturn, there are signs that the Federal Reserve may soon reverse course. As inflationary pressures start to ease, the Federal Reserve is expected to reduce interest rates, which may provide some relief to the economy in the coming years. In response, Biden’s administration hired several hundred thousand people for new probationary jobs to try to float the US economy out of the recession from 2022-2024.
5. Projections Through Christmas 2025
Despite the easing of interest rates, cheaper gas and food, the lingering effects of hyperinflation, the housing and stock market troubles, the resistance by the opposition and low level judges to Trump’s new liberating policies could extend the recession until Christmas 2025.
Because of Trump’s opposition, the U.S. economy will likely face a transitional recovery period, characterized by moderate economic growth, unemployment, and uncertain consumer and business confidence. Until builders and buyers have access to reasonable loan rates and affordable energy, Biden’s recession will continue until the Federal Reserve normalizes rates downward.
The Federal Reserve's actions to lower interest rates will help stimulate investment and consumer spending, but these efforts may be tempered by ongoing concerns about government spending and waste. However, since Trump took office, crude oil has been down 25% and Chairman Powell of the Federal Reserve can’t ignore reality with deflation staring him in the face. E.g. Math 101 ($80 to $60 is a 25% decrease).
Additionally, the housing market may remain in a bubble, as home prices are based on buyers and investors willing to pay for them and residential real estate is more attractive to REITs, immigrants, and investment bodies. Generally speaking, if you add 15 million people to the big cities of American who need housing, it will prolong inflation and higher prices for rentals, housing, food, insurance, education, and health care, but the areas outside of the big cities may do better in the near-term.
Conclusion of the Recession is Coming
The Democrats’ recession that began in 2022 (according to economic 101 definitions) can be traced back to several factors: hyperinflation, a housing crisis, immigration, energy regulations, crime, insurance costs, bad government policies, wars and conflicts, proxy wars with trading partners, and an unprecedented increase in interest rates.
These elements combined to create an economic environment ripe for contraction, with the effects rippling through the broader economy which hurt retirees, women and minorities the most as it eroded their buying power by 36% or more. [vii] Thus, the poor in the USA lost 36% of their wealth and buying power under Biden and the Democrats failed policies according to CNN and others.
Now that President Trump has won a landslide election in 2024, he has signed over 100 executive orders to provide regulatory and waste relief for working families. While there are signs of stabilization such as crude oil being down 25% in the first 75 days of President Trump’s second term, the road to recovery is likely to be measured, and the U.S. economy may not fully recover until Christmas 2025.
Furthermore, lower tariffs to sell things to 7 billion customers, successful peace talks by Trump, and lower oil and gas prices worldwide may force an economic boom with or without the Federal Reserve.
As President Trump eliminates waste, fraud, tariffs, and costly regulations while the Federal Reserve continues to adjust its policies in response to shifting economic conditions, businesses and consumers will need to prepare for a new renaissance of investment and economic growth beginning in 2026.
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Commissioner George Mentz JD MBA CILS CWM® is the first in the USA to rank as a Top 50 Influencer & Thought Leader in: Management, PM, HR, FinTech, Wealth Management, and B2B according to Onalytica.com and Thinkers360.com. George Mentz JD MBA CILS is a CWM Chartered Wealth Manager ®, global speaker - educator, tax-economist, international lawyer and CEO of the GAFM Global Academy of Finance & Management ®. The GAFM is a EU accredited graduate body that trains and certifies professionals in 150+ nations under standards of the: US Dept of Education, ACBSP, ISO 21001, ISO 991, ISO 29993, QAHE, ECLBS, and ISO 29990 standards. Mentz is also an award-winning author and award winning graduate law professor of wealth management of one of the top 30 ranked law schools in the USA.Mentzenborg is just a term of art to describe the theory and process by George Mentz JD MBA ChE. CWM is for Chartered Wealth Manager ® and ChE Chartered Economist ® is a credential for economics professionals
Endnotes
1. "US Inflation Hits 40-Year High." The New York Times, June 2022. https://www.nytimes.com
2. "Biden Administration's Impact on Housing Market in 2022." National Review, August 2022. https://www.nationalreview.com
3. "Stock Market Bubble and Correction of 2022." Wall Street Journal, November 2022. https://www.wsj.com
4. "Federal Reserve Interest Rate Hikes." Reuters, November 2023. https://www.reuters.com
5. "Economic Outlook: Recession Projections Through 2025." Bloomberg, December 2023. https://www.bloomberg.com
6. Social Security benefits have lost 36% of buying power since 2000 | CNN Politics https://www.cnn.com/2023/05/10/politics/social-security-benefits-inflation/index.html
7. USA Hyper-Inflation – 157% in Past 3 Years | Newsmax.com https://www.newsmax.com/finance/georgementz/inflation-us-biden/2024/04/10/id/1160457/
8. The Risk of Subprime Mortgages by a New Name https://www.investopedia.com/ask/answers/07/subprime-mortgage.asp?utm_source=chatgpt.com
[i] Recession: Definition, Causes, Examples and FAQs
[ii] US Claims 3.8% Unemployment. It's at Least 10%. | Newsmax.com
[iii] U.S. likely didn’t slip into recession in early 2022 despite negative GDP growth - Dallasfed.org
[iv] 2022's "technical recession" wasn't real, revised GDP data shows
[v] USA Hyper-Inflation – 157% in Past 3 Years | Newsmax.com
[vi] The Risk of Subprime Mortgages by a New Name
[vii] Social Security benefits have lost 36% of buying power since 2000 | CNN Politics