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Highlights
- Donald Trump's new global tariff concerns experts' about a potential US recession in 2025.
- JP Morgan, Goldman Sachs, and various others have raised their recession odds.
- Fed Chair Jerome Powell and other experts fear economic fallout while investors await interest rate cuts.
After the introduction of Donald Trump’s tariff, the odds of a US recession have increased. Investors, experts, and even larger institutions like JP Morgan and Goldman Sachs have updated their predictions concerning investors. The financial markets are already in turmoil, stocks are crashing, cryptos are struggling, and even the hard assets are affected. So, is recession happening in 2025? Let’s discuss this.
Trump’s Tariff: More of an Economic Revival or US Recession?
Donald Trump introduced tariffs with positive claims toward making the country wealthy, saving American jobs, and boosting domestic production. However, the analysts’ vision speaks of economic uncertainty and US recession ever since Trump introduced universal and reciprocal tariffs.
The affected countries, like China, the EU, Japan, and others, are building strategies to tackle these tariffs, with some, like China, applying reverse 34% tariffs while others asking for cooperation. Amid these, the markets are affected, resulting in many calling it the beginning of a financial crisis.
The social media platforms are filled with experts concerning rising inflation, declining yield, and eventually, recession in America. At the same time, Fed rate cuts are a must at this time. Even Trump asked Powell for cuts before it got too late in a recent X post.
JP Morgan, Goldman Sachs & Others Raise US Recession Odds
The famous financial institution JP Morgan has increased the chances of a recession to 60% by 2025, mentioning disruptive U.S. policies as the cause. At the same time, Goldman Sachs raised the recession odds from 20% to 35%.
Also, the Oxford Economic predicted 4% core inflation and GDP growth at just 1.4%. Moody’s Analytics predict 7.5% unemployment and a 2% GDP contraction if retaliation continues.
The investors’ concerns also align with these claims. The Polymarket data reveals that the odds of a US recession surged to 57% after declining from 60% earlier today.
Adding to these concerns, Federal Reserve Chair Jerome Powell is also not very optimistic about Trump’s tariffs. In a recent business journalism conference, he claimed that these were larger than expected before hinting that the economic fallout could be way worse than anticipated. However, neither he nor the Fed forecasted the recession.
Final Thoughts: Recession in 2025?
Between Jerome Powell’s indirect concerns, Polymarket probability, and JP Morgan prediction, investors’ bearish sentiments are rising, and the impact is visible on the stock market’s performance. Although it is uncertain what’s coming next, 2025 will certainly be full of economic turning points.
Now, all eyes are on the Fed meeting and any positive updates on Trump’s tariff news.
Frequently Asked Questions (FAQs)
1. Why is the recession fear rising in the US for 2025?
2. What does Jerome Powell have to say about Trump's tariffs?
3. How are stocks and other markets reacting to this economic uncertainty?
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