Former presidents Joe Biden and Donald Trump met at the White House shortly after the November 2024 general election. Trump's economic policies are causing concerns about a possible recession and a decline in the stock market. The recent drop in the S&P 500 reflects worries among investors regarding Trump's policy decisions. As the 2026 midterms draw closer, Trump faces the risk of political repercussions if he ignores the worsening economic conditions.
Trump may be repeating the mistake that contributed to the Democrats losing the previous election. Just like how Biden downplayed the impact of high inflation by emphasizing a strong economy, the Trump administration seems to be disregarding signs of economic trouble ahead.
During Biden's term, inflation was a major issue that the administration did not address adequately. The disconnect between the messaging of a robust economy and the increasing cost of living for many Americans contributed to dissatisfaction among voters.
Despite a declining stock market, reduced consumer and business confidence, and concerns about a recession under the early Trump administration, there has been little recognition or acknowledgment of the hardships arising from uncertainties caused by Trump's policies.
Economist Mark Zandi pointed out that sentiment among businesses and consumers, as well as the stock market, indicate a pessimistic outlook. The S&P 500 experienced a correction recently, dropping by 10% from its peak in February 19, marking the first correction since October 2023.
The administration has attempted to downplay the situation, with Treasury Secretary Scott Bessent describing corrections as beneficial and expressing willingness to endure market volatility while pursuing their objectives. Despite market and consumer apprehension about the impact of tariffs, Trump maintains that they are beneficial to the economy.
If the stock market does not recover soon, its decline could negatively affect the economy and highlight the contrast between the public mood during the Biden administration and the early days of Trump's presidency. Zandi warned that the administration's overlooking of economic concerns may lead to a potential recession instead of just a downturn in sentiment, which he termed a "vibecession."