Is the US headed toward a recession?

12:30 REPORT

It’s Monday. Who else cannot stop trying to mimic Parker Posey’s accent in this season of “The White Lotus?” This clip of Posey on NBC’s “Today” is all over my social media feeds. (The viral clip is around the 2-minute, 15-second mark.)

Today's forecast in DC: ⛅ 66° (Find your weather here)

In today's issue:

Trump won’t rule out a recession
Stocks tumble
Republicans worry about Trump’s tariffs
Supreme Court will hear conversion therapy case
Johnson’s plan to avoid a shutdown

Stock market may want a wellness retreat:

Tuesday marks President Trump’s 50th day in office, which has been a whirlwind of economic changes — most notably his tariffs on the U.S.’s neighbors — that have wobbled the stock markets.

On the campaign trail: Trump promised an economic boom by stopping inflation, lowering prices and cutting taxes. He repeatedly slammed the Biden administration’s policies for stifling the U.S. economy.

But now, Trump is recalibrating expectations: Over the weekend, Trump wouldn’t rule out the possibility of an economic recession, telling Fox News on Sunday there would be a “period of transition” for the U.S. “I hate to predict things like that,” Trump told Fox’s Maria Bartiromo when asked if he expected a recession this year.

^ This sent a shockwave through the market this morning: U.S. stocks tumbled even further this morning after Trump’s weekend comments. The Dow opened down 1 percent, the S&P fell by 2 percent and Nasdaq dropped by 3.2 percent.

And Republicans are worried about the economy: The Hill’s Alexander Bolton spoke with a number of Republican senators who expressed concern about the impacts of Trump’s trade policies on the U.S. economy.

The tea — one Republican senator requested anonymity to speak candidly: “Maybe if his approvals keep diving and the economy starts to pinch, maybe” Trump will shift on tariffs, “but in the meantime, what damage are we doing? … Tomorrow, he might lift all these sanctions that he just put on yesterday. It’s crazy.”

What are other officials saying about the economy?:

The Fed chair is worried about rising prices: Federal Reserve Chair Jerome Powell predicted that Trump’s tariffs will raise consumer prices in the U.S. "We're at a stage where we're still very uncertain about what will be tariffed, for how long, at what level," Powell said at an economic forum Friday. "But the likelihood is some of that will find its way. It will hit the exporters, the importers, the retailers and, to some extent, consumers."
FWIW, Trump’s Commerce head disagrees about a potential recession: Commerce Secretary Howard Lutnick immediately dismissed the suggestion of a forthcoming recession, telling NBC News’s “Meet the Press” “absolutely not” when asked whether Americans should brace for a recession.

How is the economy doing?: February’s jobs report was steady but showed a slight uptick in the unemployment level. Some experts warn that Trump’s recent mass layoffs within the federal government may not be reflected until the next jobs report.

Economics 101 — what is a recession?: A recession happens when the economy declines for two consecutive quarters.

Do economists think we’re headed for a recession?: Some economists (and betting markets) are increasing the odds of a recession, per Business Insider. But CNBC reports that while economists think Trump is an “agent of chaos,” they generally think the economy is resilient.

➤ MORE READS:

The Washington Post: As Trump intensifies his efforts, new sources of opposition include some of his loyal advisers
The New York Times: Trump’s Tactics Lead Americans to Question Role on World Stage
The Associated Press: Meet the federal worker who went rogue: ‘I hope that it lights a fire under people’
The Wall Street Journal: Inside America’s Fluoride Rebellion

🛑 On Capitol Hill

**What you’re going to be hearing a lot about this week**:

At the end of last year, Republican lawmakers punted the government funding deadline until President Trump retook office. They were hoping they wouldn’t have to negotiate with Democrats quite as much because they would control the House, the Senate and the White House.

Welp, we will hit that new deadline this week and Speaker Mike Johnson (R-La.) is still having a hard time corralling his caucus into a plan.

So, what’s the plan?: House Republicans unveiled their plan Saturday. Fund the government through Sept. 30 with a boost in defense spending and a cut on spending for nearly everything else. Trump endorsed the plan and Johnson is hoping to pass it on Tuesday to give the Senate the rest of the week to pass it. Easy enough? 🔎 Read the bill

Ha, nothing is ever easy in Congress: Republicans’ margins are even tighter in the House. Most (if not all) Democrats are likely to vote against the bill — they slammed this plan over “reckless” cuts to a number of benefits. That means Johnson would need all but one Republican to vote “yes.”

Cracks are already forming: A few conservatives and moderate Republicans are already undecided on the bill. And even if the bill does make it out of the House, Republicans would need at least seven Democrats to clear the 60-vote threshold in the Senate.

Expect a busy week on Capitol Hill as lawmakers sort that out.

Oh, and I should mention: House Democrats are planning to travel to Leesburg, Va., for their annual retreat from Wednesday through Friday. TBD whether that actually happens given the funding fight. The governors of Kentucky, Pennsylvania and Michigan are scheduled to speak, per Politico.

➤ INTERESTING READ:

The Atlantic’s Mark Leibovich sat down with former Senate GOP Leader Mitch McConnell (Ky.), who has butted heads with President Trump for years.

Read: ‘Mitch McConnell and the President He Calls “Despicable”’

🏛️ News This Morning

The Supreme Court has agreed to hear a conversion therapy case:

“The Supreme Court granted a Colorado therapist’s request to review her challenge to a state law banning mental health care providers from engaging minors in conversion therapy, a discredited practice that attempts to change a person’s sexual orientation or gender identity to align with heterosexual or cisgender norms,” reports The Hill’s Brooke Migdon.

Why this is particularly notable: “The court’s decision to take up her challenge comes after the justices previously turned away opportunities to weigh in on conversion therapy bans. The case is set to be heard during the Supreme Court’s next annual term, which starts in October.” Read more on the case

🐝 Internet Buzz

🥬 Celebrate: Today is National Ranch Dressing Day. As if you fanatics needed another reason to go overboard with the stuff! 😉

🕊️ What happened to Gene Hackman?: Authorities have confirmed the causes of death for actor Gene Hackman and his wife Betsy Arakawa, who were both found dead in their home. She died of hantavirus and he died a few days later from heart disease. What we know

📆 On The Agenda

The House and Senate are in. President Trump and Vice President Vance are in Washington, D.C. (all times Eastern)

This week: The SXSW Conference and Festivals. 💻 Livestream 🔎 Details and lineup
2 p.m.: Trump holds a roundtable with the Technology CEO Council.
2 p.m.: Vance speaks at the National League of Cities's Congressional City Conference. 💻 Livestream
3 p.m.: Trump signs executive orders.
5 p.m.: Trump ceremonially swears in the director of the Secret Service.
5:30 p.m.: Two Senate votes, including a confirmation vote on Labor secretary nominee Lori Chavez-DeRemer. 📆 Today’s agenda
6:30 p.m.: First and last House votes. 📆 Today’s agenda

👋 And Finally…

To brighten your Monday afternoon, check out these Houston Zoo animals’ first experience with snow.

Stay Engaged

Send comments, story ideas and events for our radar to cmartel@thehill.com. A friend forward this to you? Subscribe here.

View past issues of 12:30 Report here and check out other newsletters from The Hill here. See you next time!

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