- Trump’s economic agenda has fueled recession worries and led to a downturn in the stock market.
- The recent pullback in the S&P 500 underscores investor anxiety surrounding his policies.
- As the 2026 midterms draw closer, Trump could face political consequences if he continues to dismiss the increasingly negative sentiment.
President Donald Trump could be repeating the error that cost the Democrats the election last year.
Just as President Joe Biden’s claims of a strong economy overlooked the hardship many Americans faced due to high inflation, the Trump administration may now be turning a blind eye to growing economic anxiety.
Inflation emerged as a key concern for voters, and the Biden administration faced criticism for failing to address it openly. Regardless of how much responsibility Biden and the Democrats actually bore for rising prices, many voters felt there was a clear gap between optimistic economic messaging and the reality of shrinking household affordability.
In its early months, the Trump administration has faced a falling stock market, weakening confidence among consumers, businesses, and investors, and rising fears of a recession — yet there has been minimal recognition or even outright dismissal of the discomfort caused by the uncertainty surrounding Trump’s policies.
“Sentiment has clearly taken a hit,” Mark Zandi, chief economist at Moody’s, told Business Insider. “That’s evident in business and consumer surveys, as well as in the performance of the stock market.”
The S&P 500 slipped into correction territory last week, dropping 10% from its February 19 high — the first such decline since October 2023.
In response, the administration has attempted to minimize concerns. Treasury Secretary Scott Bessent called corrections “healthy” and stated that the administration is prepared to endure market volatility in pursuit of its objectives.
At the same time, Trump continues to portray tariffs as a financial boon, despite growing worries from both markets and consumers about their consequences.
This time, the administration faces the real danger that what currently feels like a “vibecession”—a downturn in public and market sentiment without hard economic data to match—could evolve into a full-blown recession.
Economist Mark Zandi emphasized that the performance of the stock market is not just symbolic; it has tangible consequences for the broader economy. That’s why, in his view, President Trump and Treasury Secretary Scott Bessent would be unwise to simply shrug off the ongoing market decline.
“The health of the economy is closely tied to consumer spending, especially spending by affluent households,” Zandi explained. “These high-income consumers tend to pay very close attention to their investment portfolios. When the market is in the red, their confidence takes a hit. If that negative sentiment deepens, it can lead them to cut back on discretionary spending—and that pullback can snowball into a wider economic downturn.”