08-05-2025
How to navigate a potential Trumpcession
The term 'Trumpcession' has been popping up in headlines this week, as economists and market watchers debate whether President Trump's economic policies could trigger a downturn. But are we actually in a recession right now? Not technically — at least not yet.
When identifying a recession, economists typically look for two consecutive quarters of negative gross domestic product (GDP) growth. While the U.S. economy shrank 0.3% in the first quarter of 2025, most experts agree that the trend will need to continue before we're officially in a recession.
But waiting for official confirmation before taking steps to safeguard your money isn't a smart financial strategy. As a certified financial planner, I've seen how early preparation can affect your financial choices during economic uncertainty. So if you're wondering how to protect your money, here's what you should know.
Is a 'Trumpcession' really coming?
Right now, no one really knows. While we've seen some positive economic indicators — like April's better-than-expected jobs report — other metrics suggest a less rosy outlook. For example, the odds of the U.S. economy entering a recession by March 2026 have risen to 36 percent, up from 26 percent in the fourth quarter of 2024, according to Bankrate's latest Economic Indicator Poll. Consumer sentiment has plummeted to its lowest level since the COVID-19 pandemic, according to the University of Michigan consumer sentiment index.
The current economic anxiety stems largely from the administration's aggressive trade policies that began in April 2025. These include a baseline 10 percent tariff on imports from all countries, with higher rates for nations where the U.S. has large trade deficits.
Should you be concerned about bank safety?
Your money in the bank remains safe during economic uncertainty. Deposits in Federal Deposit Insurance Corp. (FDIC)-insured banks or National Credit Union Administration (NCUA)-insured credit unions are protected up to $250,000 per depositor, per institution and per ownership category.
The real concern isn't bank safety but potentially shrinking returns. During economic downturns, interest rates typically fall as the Federal Reserve tries to stimulate spending. This creates a mixed bag for your money — potentially lower mortgage rates, but also reduced returns on your savings accounts, certificates of deposits (CDs) and money market accounts. This can particularly impact savers who rely on interest income.
Banking moves to make right now
1. Diversify your accounts
Think of your cash like a sports team — you need players with different strengths. Instead of keeping everything in one account, consider spreading your money across these options:
