Why Trump has turned the US economy into a Nike swoosh: Economist
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The US economy isn’t heading for a crash landing. It’s just coasting through a curve.
Torsten Sløk, chief economist at Apollo Global Management, likened current conditions to the iconic Nike swoosh — a dip followed by a gradual rebound. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
“It makes sense to worry about the trade war. It makes sense to worry about immigration restrictions, deportations. It makes sense to worry about student loan payments, but overall, this is more like a Nike swoosh,” Sløk said on Yahoo Finance’s Opening Bid Unfiltered.
“Not a recession, but a Nike swoosh, where we have a slowdown over the next several quarters and then we start to recover again,” he explained.
The analogy captures a key sentiment on Wall Street. While growth is cooling and headwinds remain, the economy is not tipping into recession territory — just softening after years of outsized gains.
Several indicators support this more optimistic view. Consumer spending has remained steady despite high borrowing costs. The job market, while slowing, continues to post solid numbers.
Read more: What is a recession, and how does it impact you?
The latest gross domestic product (GDP) print and July jobs report, both due this week, will offer fresh insights. Ahead of the second quarter GDP report, economists are expecting growth to rebound to a 3% annualized rate after the economy shrank 0.5% in the first quarter. Meanwhile, it’s estimated that the economy added about 102,000 jobs last month, with the unemployment rate ticking up to 4.2% from 4.1% in June.
Investors will also be watching for updates on a trade deal between the US and the EU, which includes a baseline tariff rate of 15% on EU imports. President Trump has called the deal “the biggest of them all,” suggesting any developments could influence sentiment on tariffs and broader economic growth.
Whether the Federal Reserve cuts interest rates later in 2025 remains a wild card. According to the CME Group’s (CME) FedWatch tool, markets have currently assigned only a 3% probability of a cut at the Fed’s July meeting.
The backdrop helps explain why some economists still view the recession risk as real, even if those concerns have eased in recent months. “Some people put a lot more weight on [these headwinds] than I do and say that the risk of a recession therefore is higher,” Sløk said. “But I think the recession probability … is lower today than where it was just a few months ago.”
Other points of contention remain. Sløk flagged a “huge point of divergence” between how markets and economists are viewing the potential fallout of political uncertainty and the future of the Federal Reserve, particularly its independence.
“Fed watchers are really, really worried about this issue,” he said. “But in markets, there’s just a lot of complacency that even if a new Fed chair advocates for rate cuts, the rest of the committee could vote otherwise.”
Fed Chair Jerome Powell’s term expires in May 2026, with potential names like Chris Waller and Scott Bessent as contenders to replace him.
Join former Fed Vice Chair Lael Brainard, along with other newsmakers and top investors, at Yahoo Finance Invest on November 12–13 in NYC as they discuss the agenda for success in 2026. Register to attend today.
Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at francisco.velasquez@yahooinc.com.
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