- Wall Street is increasing the likelihood that the U.S. economy might fall into a recession. , with some economists viewing the chances as equally likely. This comes as President Donald Trump continues to show no indication of retreating from his robust tariff policies, which include retaliatory charges scheduled to be implemented in a matter of weeks.
There is an increasing probability that the U.S. economy might fall into a recession according to analysts on Wall Street, with several economic experts considering the chances to be as high as 50-50.
The JPMorgan chief economist, Bruce Kasman, informed journalists in Singapore on Wednesday that he currently envisions roughly 40% recession risk , increasing from around 30% at the beginning of the year.
However, he noted that the chances of a recession could increase to 50% or higher if the proposed retaliatory tariffs by President Donald Trump, scheduled to be implemented on April 2, were actually enforced significantly.
"If we keep moving along this path toward even more disruptive, business-hostile policies, I believe the risk of heading into a recession would increase significantly," Kasman stated.
In the meantime, ex-Treasury Secretary Larry Summers cautioned that there’s roughly a 50% probability of an economic downturn. He attributed this risk to several factors: Trump's tariffs, stricter immigration policies, and widespread federal employee dismissals—all contributing to significant decreases in both consumers’ and businesses' expenditure intentions.
As economic predictions get adjusted towards a particular trend, they often gain inertia, he notes. said to Bloomberg TV on Tuesday And all the changes being made are leading to slower expansion.
Summers chimed in, saying, "We have a significant ambiguity issue here. It will likely be challenging to resolve this. Our growth projections are definitely going to miss the mark, pointing towards a deceleration. Additionally, there’s roughly a 50-50 chance we’ll see a downturn."
Mark Zandi, the lead economist for Moody's Analytics, has increased his probability estimate of an economic downturn to 35%, up from the initial 15%, largely due to tariff concerns.
However, if Trump proceeds with his tariff plans and maintains them for longer than just a few months, this could lead to an economic downturn, pushing the country into a recession. told Bloomberg TV on Wednesday.
At present, he remains hopeful that the discussions will result in reducing the tariffs, a prospect that keeps his prediction under 50%.
“But I can’t say that with much assurance as time goes on,” Zandi stated. “Moreover, the ambiguity surrounding these issues is causing harm.”
In fact, studies of customers and companies demonstrate growing pessimism regarding the economy due to uncertainties surrounding tariffs and widespread federal employment reductions. Even business leaders are becoming more apprehensive. deep-red states Those who supported Trump mention observing a deterioration in business circumstances.
Elsewhere on Wall Street, the likelihood of a recession isn’t as significant, yet it’s increasing notably. According to market experts Ed Yardeni and Eric Wallerstein, this trend is clear. earlier this month They view the chances of a bear market and a recession triggered by tariffs as 35%, an increase from 20% previously.
And Allianz Chief Economic Advisor Mohamed El-Erian raised his recession probability estimate to 25%-30%, up from 10% at the start of the year.
The Treasury Secretary, Scott Bessent, was questioned about NBC's Meet the Press on Sunday If he could ensure there wouldn’t be a recession, he responded that nothing can be guaranteed, noting that his previous statement about economic adjustments does not necessarily imply a downturn will occur.
"I assure you that continuing down this path would have led us into a financial crisis,” he stated. “Having researched and taught about it, I know that maintaining those expenditure levels would have made everything financially untenable. Therefore, we are readjusting our approach to ensure sustainability.”
In turn, Trump over the past weekend declined to exclude the possibility of a recession , leading to a plunge in stock prices. Then, just days later, he stated that he doesn't anticipate such an event. However, Trump remains steadfast on his trade strategies, stating on Thursday that "I'm not going to yield whatsoever."
And when questioned regarding the sharp dive in approval In a recent CNN survey about how Americans perceive Trump’s management of the economy, the White House supported his economic strategies and highlighted his achievements from his initial term.
Following President Trump's election, business executives have reacted to his America First economic strategy involving tariffs, deregulation, and the expansion of American energy initiatives by pledging over a trillion dollars in investments aimed at generating tens of thousands of new employment opportunities," stated spokesperson Kush Desai. "During his initial term, President Trump facilitated unprecedented increases in jobs, wages, and capital expenditure; he aims to achieve similar outcomes during his subsequent tenure.
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