U.S. Recession May Already Be Locked In, Economist Warns

Renowned economist Steve Hanke believes the U.S. economy is already sliding toward a recession, driven by shrinking money supply and growing political instability.

In a recent interview, Hanke said the downturn is not just likely—but inevitable.

Citing persistent declines in the money supply, Hanke argued that historical patterns are playing out again. “This is a slow-moving train,” he said, noting that monetary contractions often lead to delayed but significant drops in economic activity.

Hanke, a professor at Johns Hopkins, also highlighted early warning signs like hiring freezes, especially for recent college graduates. He attributed this hesitancy to rising “regime uncertainty,” as businesses grow increasingly cautious about future regulations and tariffs under Donald Trump’s administration.

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Policy unpredictability, he said, is discouraging investment and hiring—paralleling the uncertainty of the 1930s New Deal era. Hanke estimates the chance of a 2025 recession at 90%, warning that unless clarity returns to the economic landscape, the situation may worsen.

Compounding the risks are escalating tensions in the Middle East, with the U.S. now more directly involved in the conflict between Iran and Israel—adding a new layer of uncertainty to an already fragile outlook.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.