'Yellow lights are flashing' as Trump strategy rattles markets: CNN reporter

Donald Trump's remarks about the economy did nothing to alleviate concerns of a recession, and CNN's Matt Egan said on Monday that warning lights are flashing.

The president said over the weekend that he was loathe to predict whether the economy would tumble into recession this year, but he did concede the economy was going through "a period of transition" under his watch, and Egan said that offered little reassurance to spooked investors.

"It's just way too early to know if there's going to be a recession, but what is clear is that yellow lights are flashing in this economy, and it is suddenly really facing significant pressure," Egan said. "We've seen consumer confidence tumble, consumer spending dropped, GDP forecasts have been slashed, and, yes, the stock market is really wobbling. You mentioned the Dow off by about 500 points or around 1 percent today, the Nasdaq falling by over 3 percent. this is partially being driven by uncertainty and chaos over the president's trade strategy. I talked to a market veteran, Michael Block, and he said, look, investors are having trouble digesting all of this multi-dimensional chess from Trump. He said there might be a method to the madness, but the market is saying, stop confusing us – we don't like it. Former New York fed president Bill Dudley, he told me today that the president's tariff and trade war strategy is starting to backfire on the economy."

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"So all of this uncertainty and chaos and confusion, it can have a real chilling effect on not just the stock market," Egan added. "But the real economy when it comes to consumer and business spending, it is fair to say that the risk of a recession has gone up, but it's just too early to say that that's where this is going. Goldman Sachs put out a note the other day where they upped their odds of a recession over the next 12 months, from 15 percent to 20 percent, so not a dramatically higher move from Goldman Sachs, and they said the real risk right now is policy. But they noted that the president has the ability to change policy to effectively call an audible if a recession does look imminent, so they're kind of saying, maybe the president's going to blink here if the economy is really struggling."

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