Janet Yellen, former Treasury Secretary under the Biden administration, strongly criticized President Donald Trump’s recent tariff strategy, labeling it as a major misstep for the U.S. economy. In an interview on Thursday, Yellen remarked that the president’s approach represents “the worst self-inflicted wound that I have ever seen in an administration impose on a well-functioning economy.”

Her comments come in the wake of Trump’s decision to suspend proposed tariffs amid a notable surge in U.S. Treasury yields. Yellen suggested that the increase in yields may have played a role in influencing the administration’s tariff pause. Although Trump characterized the delay as a strategic move to advance trade negotiations, Yellen viewed it as a necessary retreat in response to market pressure.

Yellen went on to warn that the broader direction of Trump’s economic policies could elevate the likelihood of a recession. She voiced concerns about the long-term stability of an economy burdened by volatile trade policies and stressed the importance of predictable governance in maintaining investor and market confidence.

“The risk of recession has increased,” Yellen cautioned, noting that erratic decision-making can quickly erode the economic progress made in recent years. Her statements highlight growing anxieties among economists and financial leaders regarding the potential fallout of confrontational trade stances, especially when imposed in the context of global economic uncertainty.

President Trump has defended his use of tariffs as a powerful tool to pressure trade partners and protect U.S. industry. He maintains that such actions are part of a long-term strategy to rebalance global trade and reduce dependence on foreign markets. However, critics argue that these policies are destabilizing and could backfire by raising costs for American consumers and businesses.

The economic debate surrounding the tariffs and their suspension underscores a broader divide in U.S. fiscal strategy. As markets continue to react to developments, analysts will closely monitor how Trump's administration navigates the balance between bold policy ambitions and economic fundamentals in the coming months.