- Kenneth Rogoff warned that the likelihood of a US recession had increased “sharply.”
- He said President Donald Trump’s tariffs were affecting consumer confidence.
- Rogoff said consumers who didn’t vote for Trump “think it’s the end of the world.”
Kenneth Rogoff said the odds of a recession had risen “sharply” in the wake of President Donald Trump’s tariffs.
The Harvard University economist told the In Good Company podcast: “It’s sort of funny but the nature of the recession we might get is a loss of confidence, not an oil shock, not a pandemic, not a global financial service, but among consumers — particularly consumers who didn’t vote for Trump, which is about half of people.
“They think it’s the end of the world. They think it’s 2008/9, the global financial crisis, the pandemic,” he said.
Rogoff told presenter Nicolai Tangen, the CEO of Norges Bank Investment Management, it was difficult to determine how much of Trump’s actions were “bluster, theater.”
“It seems like he’s spinning a wheel when he wakes up every morning, and first he spins the wheel to see what country it points at, and then he spins the wheel to see what tariff he wants to put on, and then he changes his mind the next day,” Rogoff said in response to a question about what tariffs might look like a year from now.
“You don’t know what’s coming — it’s like he wants everyone to hide from him.”
Rogoff compared countries seeking trade deals to penguins in the North Pole that don’t want to get eaten by polar bears, but didn’t want to fight them either.
He also described the dollar as “middle-aged,” adding: “We sort of reached the peak 10 years ago in terms of the dollar’s footprint and dominance in the global economy.”
Rogoff described the situation as a “wild” time. “I think it feels a little like the 70s to me. Trump actually feels a little like Nixon to me,” he said, highlighting what he called a lack of understanding about the president’s actions and plans.
