The U.S. economy is sailing into stormy waters, and a major recession may be looming on the horizon, according to Forbes Media Chairman Steve Forbes. Appearing on “Varney & Co.” Monday, Forbes warned that a weakening U.S. dollar, misguided Federal Reserve policy, and intensifying trade tensions are forming a dangerous trifecta that could send the economy spiraling.
“The dollar is weakening, and that always leads to future inflation,” Forbes said bluntly. “Since 2023, gold has surged from $1,800 to $3,400 an ounce — that’s a flashing red signal. A weak dollar means turbulence, higher prices, and economic instability. Just look at what happened in the 1970s.”
His stark warning comes as markets falter: all major Wall Street indexes dropped more than 1% Monday, and the U.S. dollar slipped to a three-year low, according to Reuters. The chaos follows President Donald Trump’s escalating feud with Federal Reserve Chairman Jerome Powell, whom he recently called a “major loser” while demanding aggressive rate cuts.
“Powell’s termination cannot come fast enough,” Trump posted on Truth Social last week. Powell has signaled his intention to serve out his term through May 2026, despite the backlash.
Forbes didn’t mince words on the Fed’s role in the current crisis.
“The Fed doesn’t understand inflation. It blames prosperity for rising prices,” he said. “Their entire model is broken. Cutting rates won’t fix what tariffs and uncertainty are doing to the economy.”
The economic uncertainty has only grown since Trump announced sweeping “Liberation Day” tariffs, triggering fears of retaliatory measures that could spike inflation and delay expected Fed rate cuts. Initially, investors sought refuge in traditional safe havens like U.S. Treasuries and the dollar. But as the full scale of the reciprocal tariffs became clearer, many began fleeing those assets.
“If this trade chaos isn’t resolved in 90 days, prices will surge,” Forbes predicted. “People still need to trade. They’ll pay more because they have no choice.”
Though he hinted at the possibility of selective deals or exemptions, Forbes believes the current economic policy is sowing unnecessary fear.
“This uncertainty is killing business confidence,” he said. “If we don’t change course, we’re steering straight into a recession.”