Donald Trump Confirms Possible US Recession As COVID-19 Restrictions Last Months

KEY POINTS

The COVID-19 crisis has changed Trump's sunny outlook enough to have him admit an economic recession is possible
His remarks about a recession and the COVID-19 pandemic lasting into August hurled the Dow Jones to its second worst percentage loss in its history
Kevin Hassett, former chairman of the Council of Economic Advisers, thinks there's "close to 100% chance of a global recession"

President Donald Trump for the first time in his presidency admitted an economic recession under his watch might be possible this year.

On Monday during a coronavirus briefing at the White House, Trump told the gathered media about his belief the U.S. economy “maybe” heading toward a recession because of the COVID-19 pandemic engulfing the country. He then predicted growth will later stage a strong recovery.

“Well, it may be,” Trump said in response to a question about whether the U.S. economy is headed toward a recession.

“We’re not thinking in terms of recession," said Trump. "We’re thinking in terms of the virus. Once we stop, I think there’s a tremendous pent-up demand both in terms of the stock market, in terms of the economy.”

His remarks about the recession were made before Wall Street closed for the day. Taken together with a later remark the COVID-19 pandemic might extend into July or August, this is credited with plunging already tumbling indices even further.

The Dow Jones Industrial Average lost more than 3,000 points at one point Monday -- the third worst point loss in history after the Great Depression of 1929 and 1987 Black Monday. The selloff was also the second worst percentage loss in the Dow's history behind the "Black Monday" crash in 1987. Analysts said it was fortunate Trump's remark was made a few minutes before markets closed at 4:00 p.m., which prevented an even broader selloff.

The new worst day saw the 30-stock Dow close 2,999 points lower, or by 12.9%, to 20,188.52 points. The Dow was briefly down more than 3,000 points in the final minutes of trading. The S&P 500 dropped 12% (its lowest level since December 2018), while the NASDAQ Composite closed 12.3% lower, also in its worst day ever.

Also contributing to the market's gloom were statements made by Kevin Hassett, former chairman of the Council of Economic Advisers, who said Monday to CNN he thinks there's "close to 100% chance of a global recession." He also predicts the U.S. might lose up to one million jobs in April alone as the pandemic bites deeper into the economy. "

There's a whole bunch of really bad numbers coming in," said Hassett.