After just a month and a half back in the White House, is President Trump living up to his campaign promises of economic prosperity?
Yahoo Finance senior columnist Rick Newman comes on Market Domination Overtime to analyze the Trump administration and Republican lawmakers' sentiments on the economy as fears of an oncoming recession begin to linger.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
On the campaign trail, Donald Trump promising to bring prices down on day one and perform an economic miracle. But just a few weeks into his term, President Trump is talking about the possibility of a recession and blaming elevated prices on his predecessors. So what exactly is going on here? Joining us now to help us figure it all out is Yahoo! Finance's Rick Newman. Rick.
Hey guys. Well, you said what exactly is going on here? Nobody knows exactly what's going on here because you have to get inside Trump's head on this. But yeah, I looked at, um, the difference. It's a stark contrast between candidate Trump last fall and President Trump this fall. Last fall, he said we are quickly going to turn this economic nightmare into an economic miracle. And he also said, vote Trump and your net worth will skyrocket. Um, so no time frame on when your net worth is going to skyrocket. I think a lot of, a lot of voters thought that was, uh, Trump meant that that was going to happen during the first six or 12 months of his presidency. Now, not so much. So what is going on here? So there's this new theory. This, this might sound a little wacky and I'm not saying I endorse this, but some Trump watchers are saying, maybe Trump actually wants to get a recession out of the way early in his administration for a couple of reasons. Number one, still close enough to the Biden administration that he can say that by that, that recession started under Biden. I, I'd had nothing to do with it. He's already taken that line on inflation. And number two, if he, if, if we do get a, let's call it a mild recession this year, uh, then maybe we will be in a recovery by the time of the midterm elections, uh, which are basically 18 months from now at this point. I think there's some problems with this theory, but, um, if you're, if, for people who are wondering, Trump is unrelenting. I mean, markets are tanking and Trump just keeps layering on more tariffs. Why is he doing this? That could be part of the explanation.
Um, Rick, you know, we've talked a lot about, um, the sort of support that the party, um, has thrown behind Trump here. Um, and what, if anything, could change that? It could some of this economic pain if they're hearing from their constituents? Is that, is that something that could start to be problematic?
You know, I don't think so much about what would change views of people in the Republican Party who basically at this point, almost all Republicans are the Trump base. They're going to stick with him no matter what. But they're only a third of the electorate or more and that, that's not the reason Trump won in 2004. He, he won because he got moderates, centrists and independents, and it's, it's the direction of those people who will tell you what's happening among the electorate. So, you know, Trump's approval rating is still in the high mid to high 40% range. I think it's trouble when it gets below 40%. That means he's losing, uh, the centrists. And I, I think the dynamic here is that for those of us in the news business and those of us who follow markets every day, we're kind of horrified. I mean, like it looks like Trump is, is driving markets down deliberately. But for people who are not, you know, don't pay attention to this every day, or even don't have a large portfolio to worry about, I think they're not going to really worry about it until they start seeing problems developing in their own lives. That would be stuff like seeing prices go up. When prices go up at the grocery store or at the gas station, people see it and that's all you need to tell them. It doesn't matter what's in the headlines. If we start to have layoffs and people start to see that a, an important local employer is getting rid of some jobs and that affects some other businesses, then that will start to turn people against Trump. And it's really too early for that to be happening for the most part. I think it probably is happening in some of the federal locales where we're having all these federal layoffs which will affect a lot of local economies, not filtering through to the real economy just yet, but it's coming.
And you'll be there to keep us posted, Rick. Thanks a lot. Appreciate it.
I hope so. I hope George doesn't come for me.
It won't. You're, you're safe. You're safe, Rick. Thank you.
