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Bloomberg Quint
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US Recession Risk Still High After Trump Tariff Delay, Economists Say
- Wall Street economists maintain forecasts for a sharp US economic slowdown with elevated recession risk post Trump's tariff delay.
- Projections range from -0.1% to 0.6% GDP growth in 2025 and 0.5% to 1.5% in 2026, alongside nearly 5% unemployment and rising inflation.
- Despite market rally, economists remain pessimistic due to high US tariff rates, with a potential for sub-1% GDP growth quarters leading to a recession.
- The effective average US tariff rate slightly decreased to 26.25% after the tariff delay announcement.
- Economists foresee stagflationary pressures in the US amidst high tariffs and shifting imports away from China.
- The risk of recession remains high for the US, with Goldman Sachs pegging it at 45% and JPMorgan seeing a possible contraction later this year.
- Financial markets are volatile post-tariff delay, with the S&P 500 up 7.6% but still below the February record high.
- Federal Reserve Bank of New York predicts slower GDP growth, higher unemployment, and inflation rates in the US.
- UBS economist highlights the significant impact of US tariff decisions on imports, equating to the size of a large developed market economy.
- US willingness to raise taxes despite the tariff delay raises concerns about the economic impact and underappreciated implications.
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