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Theron Mohamed
Wed, Mar 5, 2025, 5:31 PM 4 min read
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Michael Burry, Jeremy Grantham, and other commentators have long warned about stocks and the economy.
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The president’s tariffs and Elon Musk’s DOGE job cuts are hitting markets and growth forecasts.
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Bill Gross, Paul Krugman, David Rosenberg, and Jeremy Siegel are all bracing for trouble ahead.
Michael Burry, Jeremy Grantham, and other market commentators have for years been warning that stocks will crash and the economy will crater. As a “Trumpcession” looms, the doomsayers might finally be proved right.
The Atlanta Fed’s GDPNow model forecasts the US economy will shrink by an annualized 2.8% this quarter — a dramatic swing from last week, when it predicted 2.3% growth. Inflation also jumped to 3% in January from 2.4% in September, stoking fears of stagflation.
Jeremy Siegel said in his WisdomTree commentary this week, “Virtually all recent real economic data has surprised to the downside, including jobless claims, which unexpectedly spiked above expectations.”
The “Wizard of Wharton” and author of “Stocks for the Long Run” said that grim first-quarter growth forecasts partly reflected businesses stockpiling before tariffs take effect, as imports subtract from GDP. Even if the economy grows by 1% or 1.5%, Siegel said, that would be the slowest rate in two years.
He said that, while the overall stock market could head higher, a rotation out of riskier, pricier stocks like Nvidia and into defensive stocks was “more likely now than any other time over the past couple of years.”
Bill Gross, the billionaire investor dubbed the “Bond King,” told Business Insider this week that President Donald Trump’s “destructive” tariffs threatened to choke growth and reignite inflation. He also said that the Russia-Ukraine war was dividing Western nations and that together those headwinds could hit growth stocks.
David Rosenberg, the former chief North American economist at Merrill Lynch, posted on X this week, “The recession that never came (because of the most fiscal stimulus the United States has ever seen over a five-year period in history outside of WWII) is now coming.”
The Rosenberg Research president, who in 2007 was labeled the “skunk at the picnic” and “class clown” for predicting a recession that arrived soon after, said to any investor adding risk to their portfolio, “You really need to have your head examined.”
Paul Krugman, a Nobel-winning economist and former MIT and Princeton professor, blamed the deteriorating US economic outlook on Trump’s tariffs against the US allies Canada and Mexico and on Tesla CEO Elon Musk’s aggressive spending cuts and layoffs in the public sector.
