Market crashes into bummer summer
Posted: Sun Mar 16, 2025 9:18 am
HOWDY. Welcome to this early August Tuesday edition of Brussels Playbook, where we wouldn’t blame you if the news makes you want to get the heck out of town as fast as possible. But don’t indulge your temptation to step on the gas: Traffic police around the bloc are out in force and conducting extra speed checks, Jordyn Dahl reports, for their annual road safety campaign, through Aug. 11.
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HOW WORRIED DO YOU NEED TO BE? If you’re in Washington (or, perhaps, Wilmington — the Kamala Harris campaign HQ), Monday’s widespread panic in the markets might portend a major problem. But on this side of the ocean, policymakers can probably keep their vacation plans. While the summer slowdown can increase the chances of a financial crisis, it’s too early to tell whether this will actually turn into a recession. POLITICO’s Carlo Boffa writes in from Frankfurt with this explainer …
It’s the (U.S.) economy, stupid: Fears of a recession in the U.S. picked up on Friday. A government report showed the proportion of people looking for a job is at a post-pandemic peak, combined with a sharp slowdown in hiring. Traders took this to mean that the economy might soon find itself in a downturn and rushed to sell stocks before a recession hits.
Political consequences: The bad news in the stock market hands Republicans a powerful talking point as they aim to link Harris to “Bidenomics.”
For Europe, the picture is more nuanced. “Taken for itself,” said Carsten Brzeski, the chief economist ING Germany, this is just a “market correction” that needn’t alarm policymakers.
Unless, he conceded, “this market rout really reflects an upcoming recession in the U.S.” That’s still unlikely, despite the mounting risk, reports POLITICO’s Stateside reporter Victoria Guida (plus, Asian markets rebounded overnight). Still, an American slump would likely spread to Europe — yet pols on this side of the Atlantic might be too slow to react. “When a U.S. recession comes, Europe’s first reflex is always to say that we’re different,” Brzeski said, recalling what happened in 2008. “And then six months later, we’re realizing that we’re in the same boat and that we’re also slowing down.”
BLACK MONDAY AFTERMATH Share on Twitter Share on chinese overseas british database Facebook Share on Linkedin Share on Handclap4
HOW WORRIED DO YOU NEED TO BE? If you’re in Washington (or, perhaps, Wilmington — the Kamala Harris campaign HQ), Monday’s widespread panic in the markets might portend a major problem. But on this side of the ocean, policymakers can probably keep their vacation plans. While the summer slowdown can increase the chances of a financial crisis, it’s too early to tell whether this will actually turn into a recession. POLITICO’s Carlo Boffa writes in from Frankfurt with this explainer …
It’s the (U.S.) economy, stupid: Fears of a recession in the U.S. picked up on Friday. A government report showed the proportion of people looking for a job is at a post-pandemic peak, combined with a sharp slowdown in hiring. Traders took this to mean that the economy might soon find itself in a downturn and rushed to sell stocks before a recession hits.
Political consequences: The bad news in the stock market hands Republicans a powerful talking point as they aim to link Harris to “Bidenomics.”
For Europe, the picture is more nuanced. “Taken for itself,” said Carsten Brzeski, the chief economist ING Germany, this is just a “market correction” that needn’t alarm policymakers.
Unless, he conceded, “this market rout really reflects an upcoming recession in the U.S.” That’s still unlikely, despite the mounting risk, reports POLITICO’s Stateside reporter Victoria Guida (plus, Asian markets rebounded overnight). Still, an American slump would likely spread to Europe — yet pols on this side of the Atlantic might be too slow to react. “When a U.S. recession comes, Europe’s first reflex is always to say that we’re different,” Brzeski said, recalling what happened in 2008. “And then six months later, we’re realizing that we’re in the same boat and that we’re also slowing down.”