A recession is no longer a distant possibility—it’s edging closer by the day. Tariffs, government cutbacks, and rising economic uncertainty are putting Americans on high alert, with red flags popping up across nearly every sector.
Economy Heads Toward a Downturn
President Trump is on a mission to transform and fix the economy, using tariffs as a key strategy to ensure greater long-term stability. But the road to recovery is bumpy, and the short-term costs are starting to show.
The administration has ramped up tariffs to their highest levels since the 1940s. Slapping levies on key trading partners like China, Canada, and Mexico. Though the goal is to protect American industries, the constant back-and-forth—one minute imposing tariffs, the next hitting pause—makes it harder for businesses to plan effectively. The fallout? Companies are cutting back on hiring and spending, while government cutbacks are triggering private sector layoffs.
These cuts don’t just affect federal employees. They ripple throughout the economy. Fewer government jobs mean less disposable income in circulation. Leading to reduced consumer spending, which in turn fuels an economic slowdown.
Wall Street Reacts to Recession Fears
Wall Street is paying attention, and it’s not looking good. A major bank recently increased its odds of a recession in 2025 from nearly zero to a much more concerning estimate. Ed Yardeni, an economist known for his typically optimistic outlook, now puts the odds at 35%—a huge jump from his previous 20% estimate.1
Other signs are piling up. Consumer confidence has taken a hit for three straight months, marking the biggest drop since August 2021. The Conference Board's expectations index, which tracks consumer sentiment about the future, has dropped significantly below the critical recession warning threshold of 80. In fact, more Americans than ever before think a recession is on the way.
Consumer Spending and Hiring Drop
The American consumer, who drives much of the economy, is pulling back. In January, consumer spending took a nosedive, and experts are predicting more contraction. The Atlanta Federal Reserve forecasts a 2.8% decline in the first quarter of 2025, while other economists predict sluggish growth at best—hardly the recovery many had hoped for.2
The job market, once a bright spot, is starting to dim. Hiring has slowed, and even traditionally strong sectors like healthcare are cutting back. “Layoff anxiety” is at an all-time high. More Americans expect fewer job opportunities in the coming months than at any time in over a decade.
Market Turmoil and Investor Anxiety
Investors are acting as if a recession is already here. Major U.S. stock indexes have plunged deep into negative territory this year. The S&P 500 suffered a brutal 7% multiday decline, wiping out post-election gains. The tech-heavy Nasdaq 100 is down 10% from recent highs. Even the once-mighty “Magnificent 7” stocks have slipped into correction territory, losing a staggering $1.6 trillion in market value.3
Small-cap stocks have taken an even harder hit. They are more vulnerable to economic downturns since they are so debt dependent. The Russell 2000 index is down 7% for the year, outpacing the losses of larger companies. Hopes for a small-cap rally, driven by falling interest rates, are quickly fading.
Meanwhile, bond yields are sinking as investors bet on the Federal Reserve cutting rates to stop the looming downturn. But the Fed is stuck between a rock and a hard place—persistent inflation and a slowing economy. The risk of stagflation is rising. If the Treasury is forced to raise bond yields to fund government spending, inflation could surge even higher, further crushing household budgets.
Investor anxiety is fueling an unprecedented surge in gold prices, now breaking records at over $2,900 an ounce. As fear takes hold, more investors are scrambling to secure their wealth in gold. Experts forecast that this rally is just getting started, predicting even higher prices in the months to come.
Is a Recession Inevitable?
Investment firm Morningstar tracks key signs of a recession. Here are a few red flags we’ve already hit:
Inverted Yield Curve: The yield curve was inverted for more than two years before turning positive at the end of 2024. Historically, recessions tend to begin within six months after an inversion ends.4
Stock Market Decline: On March 10th, the Dow Jones plunged 890 points—its worst day of the year.5
Falling Home Sales: Existing home sales in January fell more than expected, signaling that the housing market is weakening.6
Inflation Concerns: Consumer sentiment dropped by 10% in February, primarily due to rising inflation concerns.7
So, how likely is a recession? JPMorgan puts the odds at 20%, while Bankrate estimates 26%. But let’s not forget—these same analysts predicted catastrophic recessions in 2022 and 2023, only to be proven wrong. The Biden administration kept a downturn at bay with massive government spending. However, that spending built a fragile, government-dependent economy. And like a house of cards, one that’s poised to collapse under its own weight.8
Some analysts are less optimistic. Primerica sees a 50% chance of recession, and Raymond James puts it at 40%. They cite trade wars, geopolitical conflicts, stock market volatility, and political instability as contributing factors.9
Who Owns the Economy?
If a downturn does hit, Treasury Secretary Scott Bessent argues it will be the result of lingering Biden-era policies. “Trump won’t own the economy for another 6 to 12 months,” Bessent stated. He believes the private sector has already been in a recession, masked by excessive government spending that created the illusion of growth. While government-dependent sectors like healthcare and education flourished, private industry struggled under regulatory burdens and market distortions.10
The goal now, according to Bessent, is to “re-privatize the economy” by cutting government interference and allowing private enterprise to drive sustainable growth.
How to Brace for a Downturn
As inflation and recession fears batter retirement accounts, it’s more important than ever for Americans to protect their financial future. One of the best strategies? Diversifying with physical gold and silver—assets that have historically held their value during times of economic turmoil. The soaring price of gold reflects the growing demand for safe-haven assets.
Holding precious metals in a Gold IRA can provide tax-advantaged protection for the long haul. To learn more about securing your wealth against uncertainty, contact American Hartford Gold today at 800-462-0071.
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Max Baecker is the President of American Hartford Gold (AHG), the nation’s largest retailer of precious metals. He leads American Hartford Gold’s mission to help clients achieve long-term financial security with physical gold and silver.
Under his guidance, American Hartford Gold has delivered billions of dollars’ worth of precious metals to thousands of satisfied clients.
Max's dedication to upholding American Hartford Gold's industry-leading standards is reflected in its accolades. American Hartford Gold has made numerous high-ranking appearances on the prestigious Inc. 5000 List of America’s Fastest-Growing Private Companies. AHG holds an A+ Rating from the BBB and a 5-Star Rating on Trustpilot from thousands of American Hartford Gold reviews. American Hartford Gold is the only precious metals company trusted and recommended by Bill O’Reilly.
AHG offers investment-grade gold and silver coins and bars at competitive prices. Clients also benefit from its buy-back commitment with no back-end fees. To learn more, visit American Hartford Gold.
Notes:
1. https://www.washingtonpost.com/opinions/2025/03/06/trump-recession-tariffs-layoffs/
2. https://www.washingtonpost.com/opinions/2025/03/06/trump-recession-tariffs-layoffs/
3. https://www.businessinsider.com/stock-market-recession-selloff-russell-small-caps-treasury-yields-economy-2025-3
4. https://www.dws.com/en-us/insights/cio-view/asset-classes/inverted-yield-curves-finally-end-what-now/
5. https://www.cnn.com/2025/03/10/investing/us-stocks-drop-after-trump-says-he-wont-rule-out-a-recession/index.html
6. https://www.nar.realtor/newsroom/existing-home-sales-decreased-4-9-in-january-but-increased-year-over-year-for-fourth-consecutive
7. https://tradingeconomics.com/united-states/consumer-confidence
8. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/five-factors-we-use-to-track-recession-risk-and-what-they-say-now
9. https://www.barrons.com/articles/recession-could-be-coming-this-year-97e58b6f
10. https://www.washingtonpost.com/opinions/2025/03/06/trump-recession-tariffs-layoffs/
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