Economist warns of ‘mother of all recessions’ over Trump plans

A former economic advisor to An Taoiseach Micheál Martin has issued a stark warning as he urged the Irish public to keep an eye on Donald Trump’s moves in the US.

Dr Alan Ahearne worked under the Fianna Fáil leader from July 2020 to December 2024, where he was a key figure in advising on economy, budget and pandemic-related policies.

The University of Galway professor also served on the Central Bank of Ireland as an executive director, and also spent seven years with the US Federal Reserve — America’s central bank.

Having predicted the 2008 crash, Dr Ahearne has warned of a similar event to take place should Donald Trump take control of the US Federal Reserve.

The President of the United States of America is currently at loggerheads with the current chair, Jerome Powell, with Trump wanting to reduce interest rates.

Mr Powell’s term comes to an end in May, and the US President has already confirmed he will soon name who will take over.

The current fear is that the President will put in a ‘lackey’ as Dr Ahearne called them, who would simply do as they are told by the Trump administration.

Should Trump succeed in taking control of the Reserve, Dr Ahearne warns of ‘the mother of all recessions’ in Ireland.

The economist detailed that stock markets would fall and credit markets would tighten up ‘just like in 2008.’ He added that borrowing and lending would freeze.

Speaking to the Irish Independent, Dr Ahearne warned: ‘There would be bankruptcies and all sorts of liquidity problems in global markets. It would potentially be a terrible outcome with that sort of panic.’

Dr Ahearne urged the Irish public to keep an eye on the story and ‘follow it day by day’ as a panic in the US bond market would lead to a ‘deep recession’ worldwide.

The Galway professor noted that ‘most people’ would have saving funds in the US bond market without even realising, with many of their pension plans linked to it.

‘It’s the same for businesses and central banks all around the world,’ he added, ‘They all hold some US government bonds, and if there’s a sell-off, the price of those bonds will fall and that could give rise to a terrible global financial crisis.’

The warning comes not long after Trump detailed his plans to impose tariffs on goods from a number of European countries as part of his push to gain control of Greenland.

The head of state pledged to implement a rate of increasing tariffs on goods and services on Denmark, Norway, Sweden, France, Germany, Great Britain, the Netherlands and Finland.

The tariffs come into effect on February 1.

Taking to his social media account on Truth Social, Trump said it was time for Denmark to ‘give back’ as he warned ‘world peace is at stake.’

‘China and Russia want Greenland, and there is not a thing that Denmark can do about it,’ he stated.