Wall Street firms see recession risk rising over tariff threats, trade war

The leading Wall Street companies update their expectations to reflect the increasing possibility of the American economy that enters the recession this year, because fears of the breadth of the trade war may harm consumers and companies alike.

president Donald Trump is planning to reveal his mutual identification plans on Wednesday, April 2, which was called “Liberation Day”, while his 25 % definition on cars imported is scheduled to enter on Thursday. This customs tariff will probably arouse revenge by American commercial partners, which will affect the ability of American exporters to reach foreign markets, although Trump believes that definitions help protect the United States industry.

The impact of the escalating trade war may cause the American economy, which was already seen slowing down amid persistent inflation and the cooling market, sliding into stagnation.

On Sunday, Mark Zandy, the chief economist in Modi, wrote in a publication on X that “it is possible that the recession will start this year to 40 %, an increase of 15 % at the beginning of the year.”

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“Last week’s economic data was worrying, including the segment of consumer confidence, evil consumer spending, and constantly high inflation,” he said. “Trade War discounts and intensity behind all this, and with the announcement of last week about significant tariff increases in vehicle imports and upcoming mutual definitions, it is certain that things will get worse.”

“The recession is still less likely not only because the demobilization of the workers is still low and the growth of jobs and income positively. This Friday’s job report will give us a feeling of whether this is continuing,” Zandy wrote.

“It is too early to expect a lot of repercussions from the trade war and a fence in job data, which indicates an increase in the job of monthly salary statements that are approximately 150,000. Anything in the south of 100 thousand will be worrying, and anything will continue north of 200,000 welcome.

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Customs duties are taxes imposed on imported goods that can lead to revenge in the form of a tariff for American exporters. (Selcuk Acar / Anadolu via / Getty Images)

A team of economists in Goldman Sachs increased the recession on Sunday in a client’s memo. He wrote this, “We now see the possibility of recession for a period of 12 months by 35 %.”

“The upgrade from our previous estimate by 20 % reflects our low basic line, the last sharp deterioration in family and business confidence, and data from White House officials indicating an increase in the willingness of tolerance with economic weakness in the short term in the pursuit of their policies,” they explained.

Economists wrote: “Although the feelings have been a weak indication of activity over the past few years, we are less rejected by the recent decline because the economic basics are not as strong as in previous years.” “More importantly, real income growth has already slowed sharply and we expect only average of only 1.4 % this year.”

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Federal Reserve Chairman Jerome Powell indicated that historically, the possibility of stagnation in the next 12 months is about 1 in 4 at any time. (Alex Wong / Getty Emose)

Earlier this month, JP Morgan economists raised the possibility of recession to 40 %, up from 30 % at the beginning of the year. They repeated this opinion in the memorandum of last week, saying, “Do not reduce the ability of the American economy and the global economy to absorb shocks, with the realization that the shock of great policy/feelings may hinder even healthy expansion.”

Federal Reserve Chairman Jerome Powell said at his press conference after preparing earlier this month that the possibility of recession has increased since the beginning of the year, although it is not high and noted historically, at any specific time, there is a possibility of 1 in 4 in the next 12 months.

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“The question is whether these possibilities are, in this current position high. I will say this, we do not publish such predictions. If you look at external predictions, a number of predictors may be generally, a number of them have raised their probability of stagnation to some extent, but they are still in relatively low levels. It was very low.” So she moved, but it is not high. “