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    Delta Warns Trump’s Trade War Could Lead to a Recession

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    Delta Air Lines on Wednesday became one of the largest American companies to warn that President Trump’s escalating trade war was weighing on its business and the global economy.In an interview with CNBC on Wednesday, Delta’s chief executive, Ed Bastian, said a recession was possible as companies pulled back spending.“Everyone’s being prepared for uncertainty,” he said, “if that continues, and we don’t get resolution soon, we will probably end up in a recession.”Airlines are highly sensitive to changes in the economy because air travel is among the first things that individuals and businesses can cut back on when they are worried about their paychecks or profits.Mr. Bastian expressed shock at the speed at which the trade tensions had taken the wind out of the economy.“We’re in uncharted, unprecedented uncertainty, when you look at what’s happened and the pivot so quickly to this self-inflicted situation,” he said.Mr. Bastian’s comments are at odds with those of the Treasury secretary, Scott Bessent, who said on Wednesday that chief executives had told him the economy was solid.In its first-quarter earnings release, Delta said it no longer expected its business to grow in the second half of the year and added that a lack of the clarity about the economy prevented it from telling investors how much money it expects to make this year.Mr. Bastian said summer bookings were in line with last year. Some customs data show a sharp decline in foreigners entering the United States. Mr. Bastian said around 80 percent of Delta’s international bookings are made in the United States. “U.S. consumers are looking to go somewhere, particularly to try to get a reprieve from all the craziness we’re going through,” he said.Delta’s shares have fallen around 40 percent this year. More

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      Why Did Wall Street Get Trump So Wrong?

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      Donald Trump’s 2024 election sent many finance types into spasms of anticipatory ecstasy as they imagined freedom from regulations, taxes and unfamiliar pronouns. “Bankers and financiers say Trump’s victory has emboldened those who chafed at ‘woke doctrine’ and felt they had to self-censor or change their language to avoid offending younger colleagues, women, minorities or disabled people,” The Financial Times reported a few days before Trump’s inauguration. It quoted one leading banker crowing — anonymously — about finally being able to use slurs like “retard” again. The vibes had shifted; the animal spirits were loose.“We’re stepping into the most pro-growth, pro-business, pro-American administration I’ve perhaps seen in my adult lifetime,” gushed the hedge fund manager Bill Ackman in December.One Wall Street veteran, however, understood the risk an unleashed Trump posed to the economy. After Trump’s victory in November, Peter Berezin, chief global strategist at BCA Research, which provides macroeconomic research to major financial institutions, estimated that the chance of a recession had climbed to 75 percent. “The prospect of an escalation of the trade war is likely to depress corporate investment while lowering real household disposable income,” said a BCA report.The surprising thing isn’t that Berezin saw the Trump tariff crisis coming, but that so many of his peers didn’t. You don’t have to be a sophisticated financial professional, after all, to understand that Trump believes, firmly and ardently, in taxing imports, and he thinks any country that sells more goods to America than it buys must be ripping us off. All you had to do was read the news or listen to Trump’s own words. Yet Berezin was an outlier; most of the people who make a living off their financial acumen had less understanding of Trump’s priorities than a casual viewer of MSNBC.On Monday, as stocks whipsawed on shifting news and rumors about the tariffs, I spoke to Berezin, who is based in Montreal, about how Wall Street had gotten Trump so wrong. He told me that many investors who pride themselves on their savvy are in fact just creatures of the herd. “All these cognitive biases that amateur retail investors are subject to, the Wall Street pros, are, if anything, even more subject to them because they’ve got career risk associated with bucking the trend,” he said.People in finance, said Berezin, are more likely to be punished for being too cautious and pessimistic than for being too hopeful and aggressive. Last year, for instance, a famed strategist named Marko Kolanovic left JPMorgan Chase abruptly when his gloomy predictions about 2023 and 2024 turned out to be wrong, or least premature. Mike Wilson, also known for his bearishness, stepped down from his post as chair of Morgan Stanley’s Global Investment Committee, though he stayed with the company. “You don’t get fired for being bullish, but you do get fired for being bearish on Wall Street,” said Berezin.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      What Is a Bear Market? Are We in One?

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      President Trump’s global tariffs have sent stock markets worldwide into a tailspin, and the S&P 500 on Monday entered bear market territory for the first time since 2022.Mr. Trump has seemed unmoved by the decline. He signaled on Monday that he had no plans to back off on tariffs, insisting that they would bring in “billions of dollars” in revenue and that other countries had been “abusing” the United States with their trade policies.Here is what to know about a bear market.What is a bear market?A bear market is a Wall Street term for a sustained market downturn, when a stock index falls 20 percent from its last peak.The 20 percent threshold signals investor pessimism about the future of the economy.Are we in a bear market now?The S&P 500, the benchmark U.S. stock index, opened lower on Monday. The index was already down 17.4 percent from its last high, on Feb. 19, and if it closes Monday’s trading with a loss of at least 3.1 percent, that would tip it into a bear market.Analysts at Morgan Stanley have warned that an even steeper drop is possible. Goldman Sachs on Monday slashed its forecast for economic growth, citing a growing risk of a U.S. recession next year.The Nasdaq Composite Index, as well as the Russell 2000 index of smaller companies that are more vulnerable to the economic outlook, are already in a bear market.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump’s Tariffs Have Sown Uncertainty. That Might Be the Point.

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      Since taking office, President Trump and his advisers have explained the president’s aggressive economic approach to tariffs with a litany of conflicting ideas. Other countries are “ripping off” America and need to be stopped. The United States is fighting a drug war with Canada, Mexico and China. Tariffs will help pay down the nation’s $36 trillion debt load.The messaging hodgepodge comes as the U.S. economy shows signs of strain in response to Mr. Trump’s steep tariffs on Canada, Mexico and China and as he prepares to enact “reciprocal” tariffs on imports from around the world on April 2.The tariffs have sowed uncertainty and dampened business investment and consumer sentiment while sending markets gyrating daily. They are also likely to prevent the Federal Reserve from cutting rates as policymakers wait to see exactly what measures Mr. Trump follows through with and how they affect the economy.But rather than trying to provide more coherence about their economic strategy, Mr. Trump and his advisers seem to be embracing the uncertainty of his approach as a feature, not a bug.“Absolutely, between now and April 2, there’ll be some uncertainty,” Kevin Hassett, the director of the White House’s National Economic Council, said on CNBC this week amid questions about what investors are to make of Mr. Trump’s trade agenda.Mr. Trump, when asked whether he would give the business community more clarity about his overall approach, largely dismissed concerns that corporations needed predictability.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      U.S. Consumer Sentiment Drops as Inflation Anxiety Soars

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      Policy uncertainty and tariff whiplash are making consumers less confident about the economic outlook and more worried about inflation, new data from the University of Michigan showed on Friday, the latest evidence that Americans are bracing for pain in President Trump’s second term.A new survey released on Friday showed consumer sentiment plummeting 11 percent in March as Americans of all ages, income groups and political affiliations turned even more downbeat about the trajectory for the economy. Consumer confidence has fallen for the third consecutive month, not only about personal finances, but also the job market and stock markets. Since December, sentiment has tumbled 22 percent.“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” said Joanne Hsu, director of the Surveys of Consumers at the University of Michigan.Consumers also revised up their expectations for inflation, both for the year ahead and over a five-year horizon. Over the next 12 months, consumers expect inflation to rise to 4.9 percent, up from a forecast for 4.3 percent last month. Over the longer run, expectations rose to 3.9 percent in what was the largest monthly jump since 1993. According to the latest Consumer Price Index report, inflation stands at 2.8 percent.“This is an horrific report,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. “Elevated economic policy uncertainty and the sharp drop in stock prices have greatly undermined consumers’ confidence.”The preliminary data comes as President Trump and his top economic advisers have acknowledged that the president’s plans to reshape global trade through aggressive tariffs, to right size government spending and to alter the American immigration system, among other sweeping changes could hurt the economy or even push it into a recession.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump apuesta a que EE. UU. tolerará una recesión a fin de revivir la industria manufacturera

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      El presidente ofrece razones para imponer aranceles, como los ingresos, la influencia sobre los competidores y la creación de empleo. Pero el pasado sugiere una historia más compleja.Las guerras comerciales simultáneas del presidente Donald Trump con Canadá, México, China y la Unión Europea equivalen a una enorme apuesta económica y política: que los estadounidenses soporten meses o años de penuria económica a cambio de la lejana esperanza de reindustrializar el corazón de Estados Unidos.Es enormemente arriesgado. En los últimos días, Trump ha reconocido, a pesar de todas sus seguras predicciones de campaña de que “vamos a tener un auge como nunca antes hemos tenido”, que Estados Unidos puede dirigirse hacia una recesión, impulsada por su programa económico. Pero, en público y en privado, ha estado argumentando que “una ligera perturbación” en la economía y los mercados es un pequeño precio a pagar por traer de vuelta a Estados Unidos los puestos de trabajo en la industria manufacturera.Sus socios políticos más cercanos están redoblando la estrategia. “La política económica del presidente Trump es sencilla”, escribió el vicepresidente JD Vance en las redes sociales el lunes. “Si inviertes y creas empleo en Estados Unidos, serás recompensado. Reduciremos las normativas y los impuestos. Pero si construyes fuera de Estados Unidos, estarás solo”.La última vez que Trump intentó algo así, durante su primer mandato, fue un fracaso. En 2018 impuso aranceles del 25 por ciento al acero y del 10 por ciento al aluminio, sosteniendo que estaba protegiendo la seguridad nacional de Estados Unidos y que, en última instancia, los aranceles crearían más puestos de trabajo en Estados Unidos. Los precios subieron y se produjo un aumento temporal de unos 5000 puestos de trabajo en todo el país. Durante la pandemia, se levantaron algunos de los aranceles, y hoy la industria emplea aproximadamente al mismo número de estadounidenses que entonces.Sin embargo, lo más preocupante fue la serie de estudios posteriores que demostraron que el país perdió decenas de miles de puestos de trabajo —más de 75.000, según un estudio— en las industrias que dependían de las importaciones de acero y aluminio. La producción por hora de los fabricantes de acero estadounidenses también había descendido, mientras que la productividad de la industria manufacturera en general en Estados Unidos aumentó.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Gaming Out Trump’s Next Tariff Moves

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      In his address to Congress, the president made clear that his new trade levies were here to stay, acknowledging it might create “a little disturbance.” Analysts forecast what that might look like.President Trump’s tariffs have jolted global markets and the business world, but he has given no indication he’ll retreat on the levies.Doug Mills/The New York Times“A little disturbance” For months, the debate gripping board rooms, Wall Street and world capitals was whether to take President Trump at his word on tariffs. For a while, the markets rallied as if he were just bluffing.He wasn’t. In an address before Congress last night, Trump said that tariffs would protect American jobs and enrich the nation. He also acknowledged that “there will be a little disturbance. But we’re OK with that.”What might a “a little disturbance” look like? DealBook has taken on the task of gaming out what could happen next. (A warning to free-trade advocates: this could be tough reading.)More tariffs are coming, trade experts say. Few countries, or companies, will be spared. For example, if the tariffs on Canada, Mexico and China stick, then Europe will be next. Such a scenario is “unavoidable,” George Saravelos, the global head of FX Research at Deutsche Bank, said in a research note on Tuesday. European companies are already bracing for the next wave.“Trump has appeared to be less amenable to carve-outs in this second term,” David Seif, chief economist for developed markets at Nomura, told DealBook. That could bode poorly, he added, for Britain, whose prime minister, Keir Starmer, met with Trump at the White House last week where a trade deal was discussed. “I don’t think Keir Starmer should just feel safe right now,” Seif said.Expect more market turmoil. “These tariffs would represent a major negative global growth shock, sufficient to push many economies into recession,” Saravelos wrote, adding that it’s time to stop thinking of them as a negotiating tactic. (The recessionary risk for the United States may be remote, but concerns are growing about the tariffs’ potential stagflationary effects.)We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Economists Predicted a Recession. So Far They’ve Been Wrong.

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      A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.The recession America was expecting never showed up.Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Inflation had spiked to the highest level in decades, and a range of forecasters thought that it would take a drop in demand and a prolonged jump in unemployment to wrestle it down.Instead, the economy grew 3.1 percent last year, up from less than 1 percent in 2022 and faster than the average for the five years leading up to the pandemic. Inflation has retreated substantially. Unemployment remains at historic lows and consumers continue to spend even with Federal Reserve interest rates at a 22-year high.The divide between doomsday predictions and the heyday reality is forcing a reckoning on Wall Street and in academia. Why did economists get so much wrong, and what can policymakers learn from those mistakes as they try to anticipate what might come next?It’s early days to draw firm conclusions. The economy could still slow down as two years of Fed rate increases start to add up. But what is clear is that old models of how growth and inflation relate did not serve as accurate guides. Bad luck drove more of the initial burst of inflation than some economists appreciated. Good luck helped to lower it again, and other surprises have hit along the way.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      U.S. Economy Grew at 3.3% Rate in Latest Quarter

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      The increase in gross domestic product, while slower than in the previous period, showed the resilience of the recovery from the pandemic’s upheaval.The U.S. economy continued to grow at a healthy pace at the end of 2023, capping a year in which unemployment remained low, inflation cooled and a widely predicted recession never materialized.Gross domestic product, adjusted for inflation, grew at a 3.3 percent annual rate in the fourth quarter, the Commerce Department said on Thursday. That was down from the 4.9 percent rate in the third quarter but easily topped forecasters’ expectations and showed the resilience of the recovery from the pandemic’s economic upheaval.The latest reading is preliminary and may be revised in the months ahead.Forecasters entered 2023 expecting the Federal Reserve’s aggressive campaign of interest-rate increases to push the economy into reverse. Instead, growth accelerated: For the full year, measured from the end of 2022 to the end of 2023, G.D.P. grew 3.1 percent, up from less than 1 percent the year before and faster than in any of the five years preceding the pandemic. (A different measure, based on average output over the full year, showed annual growth of 2.5 percent in 2023.)There is little sign that a recession is imminent this year, either. Early forecasts point to continued — albeit slower — growth in the first three months of 2024. Layoffs remain low, and job growth has held steady. Cooling inflation has meant that wages are again rising faster than prices. And consumer sentiment is at last showing signs of rebounding after years in the doldrums.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More