{"id":15725,"date":"2025-04-30T06:02:07","date_gmt":"2025-04-30T06:02:07","guid":{"rendered":"https:\/\/mbt.mv\/?p=15725"},"modified":"2025-04-30T06:02:07","modified_gmt":"2025-04-30T06:02:07","slug":"economists-warn-of-rising-recession-risk-amid-trumps-tariff-uncertainty","status":"publish","type":"post","link":"https:\/\/mbt.mv\/?p=15725","title":{"rendered":"Economists Warn of Rising Recession Risk Amid Trump\u2019s Tariff Uncertainty"},"content":{"rendered":"

A growing number of leading economists are warning that the U.S. economy could be headed for a recession, with uncertainty surrounding President Donald Trump\u2019s tariff policies emerging as a key driver of market volatility and business hesitation.<\/em><\/p>\n

A new Wall Street Journal survey<\/a> of 64 economists, conducted in early April, found that the probability of a U.S. recession within the next 12 months had risen to 45%. While still lower than previous peak forecasts during earlier economic scares, the spike in concerns coincides with the latest wave of tariff announcements by the Trump administration\u2014particularly a reciprocal tariff plan announced and then paused around \u201cLiberation Day.\u201d<\/p>\n

Several chief economists from top financial institutions\u2014JP Morgan, Moody\u2019s, KPMG, and the Economist Intelligence Unit\u2014have voiced increasing concern over the economic trajectory. KPMG\u2019s Diane Swonk placed the chance of a recession this year at around 60%, warning of the potential for a deeper downturn than many currently expect. JP Morgan has also raised its estimate from 40% to 60% in response to early April tariff announcements.<\/p>\n

\u201cThis level of policy uncertainty is paralyzing capital spending decisions,\u201d said one JP Morgan economist, noting that globally-oriented companies are finding it increasingly difficult to plan amid shifting trade rules. \u201cThe strategy seems to be to create chaos\u2014and that chaos is contagious.\u201d<\/p>\n

Economists noted that while past forecasts of recession did not materialize, the current environment differs because of the wide-reaching impact of tariffs on manufacturing and consumer prices. Trump has repeatedly touted tariffs as a way to bring jobs back to U.S. factories, but recent walk-backs suggest rising pressure amid economic fallout.<\/p>\n

Federal Reserve Chair Jerome Powell acknowledged that tariffs could trigger a rise in inflation\u2014possibly temporary but potentially persistent. The central bank\u2019s preferred inflation measure, the Core PCE Index, rose 2.8% year-over-year in February. Economists warn that this could hit 4% by year\u2019s end, driven by supply chain disruptions and price pass-throughs.<\/p>\n

\u201cIf tariffs affect key components\u2014like seat belts for cars\u2014you\u2019re going to see shortages,\u201d one economist explained. \u201cThat drives prices up in the short term, and if wages chase those prices, you risk entering a wage-price spiral.\u201d<\/p>\n

This scenario raises fears of stagflation<\/em>, a painful economic mix of sluggish growth, rising prices, and high unemployment\u2014a problem that plagued the U.S. in the 1970s. Economists stressed that this would challenge the Fed\u2019s dual mandate to manage inflation and maximize employment.<\/p>\n

As businesses grapple with rising costs and consumers feel the squeeze, central bankers face tough choices. Aggressively cutting rates could worsen inflation, while keeping rates high could slow job growth.<\/p>\n

\u201cThe Fed is likely to be fashionably late,\u201d one economist noted. \u201cThey may tolerate softer growth to prevent inflation expectations from becoming unanchored.\u201d<\/p>\n

Trump has signaled some willingness to soften his stance, including reconsidering a previously announced 145% tariff on Chinese imports. Still, economists caution that a true retreat must involve not only lower tariff levels but greater clarity on future policy direction.<\/p>\n

\u201cTrust is the oil of the market machine,\u201d one economist said. \u201cWithout it, you can\u2019t do transactions. The markets\u2014and the economy\u2014need certainty.\u201d<\/p>\n

As policymakers weigh their next moves, the stakes for the U.S. economy remain high\u2014and increasingly unpredictable.<\/p>\n","protected":false},"excerpt":{"rendered":"

A growing number of leading economists are warning that the U.S. economy could be headed for a recession, with uncertainty surrounding President Donald Trump\u2019s tariff policies emerging as a key driver of market volatility and business hesitation. A new Wall Street Journal survey of 64 economists, conducted in early April, found that the probability of<\/p>\n","protected":false},"author":1,"featured_media":15726,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2423,2460,2506,2465],"tags":[2820,2824,2657,786,2627,2821,2822,2826,2823,2816,2819,2549,2817,2818,2825],"class_list":{"0":"post-15725","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"category-features","9":"category-top-stories-block","10":"category-world-news","11":"tag-economic-uncertainty","12":"tag-economist-intelligence-unit","13":"tag-federal-reserve","14":"tag-global-trade","15":"tag-inflation","16":"tag-jp-morgan","17":"tag-kpmg","18":"tag-market-volatility","19":"tag-moodys","20":"tag-recession-risk","21":"tag-stagflation","22":"tag-tariffs","23":"tag-trump-administration","24":"tag-u-s-economy","25":"tag-wall-street-journal"},"yoast_head":"\nEconomists Warn of Rising Recession Risk Amid Trump\u2019s Tariff Uncertainty - Maldives Business Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mbt.mv\/?p=15725\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economists Warn of Rising Recession Risk Amid Trump\u2019s Tariff Uncertainty - Maldives Business Times\" \/>\n<meta property=\"og:description\" content=\"A growing number of leading economists are warning that the U.S. economy could be headed for a recession, with uncertainty surrounding President Donald Trump\u2019s tariff policies emerging as a key driver of market volatility and business hesitation. 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