Hear from the President! Donald Trump says he wants a recession but not a depression

President Donald Trump admitted this week that he knew his tariff policies might trigger a recession—but said he was determined to avoid a full-blown depression. The revelation came from a Wall Street Journal report published Wednesday night, citing conversations the president had with his advisors behind closed doors.

In his words, Trump was okay with a little "pain" in the economy if it helped push forward his trade agenda, but he wasn’t willing to let it spiral out of control. And the markets felt every bit of the pressure—until Trump reversed course midweek.

Why did Trump backtrack on his aggressive tariff plans?

President Trump initially rolled out steep, widespread tariffs that rattled global markets. But as bond markets began to spiral and fears of a deeper economic hit grew louder, he stepped back. On Wednesday, April 9, Trump paused a planned increase in reciprocal tariffs for 90 days, though he still raised duties on Chinese imports to a massive 125%.


A big part of this shift came from watching the markets. The 10-year Treasury yield surged above 4.5% between Tuesday night and Wednesday morning. There were even rumors that countries like China or Japan were dumping U.S. bonds—a move that could wreak havoc on borrowing costs.

Trump’s advisors were paying attention too. Kevin Hassett, Director of the U.S. National Economic Council, told CNBC on Thursday that the collapsing bond market played a major role in Trump’s decision.

“There’s no doubt that the Treasury market yesterday made it so that the decision… was made with, I think, perhaps a little more urgency,” Hassett said on Squawk Box.

Was a U.S. depression really on the table?

Trump’s concern wasn’t just political noise. Economists define a depression as a more severe, long-term version of a recession, typically with widespread unemployment and prolonged economic pain. The last time the U.S. saw anything close was the Great Depression of the 1930s, when jobless rates hit 25%.

Thanks to modern policies like deposit insurance from the FDIC and better central bank action, the country has avoided another depression for nearly a century. But Trump's aggressive tariff strategy made some experts nervous, fearing that paralyzed global trade could push the economy too far.

That said, most economists weren’t predicting a full depression—just a possible recession, which is already bad enough. Trump, however, was clear with his team: he didn’t want to go down as the president who triggered a depression.

How did the markets react to Trump’s tariff reversal?

The market wasted no time reacting. After days of selloffs and investor panic, the S&P 500 saw its best trading day since 2008 on Wednesday after Trump announced his partial rollback.

Investors calmed down, and the stock rally reflected renewed optimism. Bond prices, which move opposite to yields, also began to stabilize as concerns over foreign bond dumping cooled off.

Even Trump himself commented on how jittery things got.

“I thought that people were jumping a little bit out of line,” Trump said after his decision. “They were getting a little bit yippy, a little bit afraid.”

What pushed Trump to shift gears on tariffs?

According to The Wall Street Journal, Trump’s sudden pivot wasn’t just about Wall Street. His administration began receiving fresh commitments from multiple trade partners to work toward “favorable” agreements. That, according to White House spokesman Kush Desai, was enough to convince Trump to take a more balanced approach.

Desai said Trump’s focus was always on what benefits Americans the most, explaining that the administration would use a mix of tariffs and negotiations to address trade deficits.

Behind the scenes, Treasury Secretary Scott Bessent played a larger role than before. His influence reportedly helped Trump take a more cautious path, while the sheer number of countries open to negotiations also factored into the shift.

What happens next in Trump’s trade strategy?

Right now, Trump is playing a delicate balancing act—pressuring trade partners without putting the U.S. economy in too deep a hole. The 90-day pause gives him time to secure better deals while calming investors and market watchers.

It’s clear that Trump’s team is watching not just politics but the financial signals too. With recession fears still lurking, the president seems determined to avoid repeating history—and avoid a depression at all costs.

FAQs:

Why did Trump say he wants a recession but not a depression?
Trump admitted tariffs may cause a recession but said he wants to avoid a depression’s deeper damage.

How did markets react to Trump’s tariff pause?
The S&P 500 had its best day since 2008 after Trump paused tariff hikes and eased investor fears.