Foreign Firms Doubt Trump Tariffs' Benefits, US Recession Looms in 2025
20 April 2025 路 Uncategorized 路
Source: 路 https://finance.technews.tw/2025/04/05/the-us-gdp-may-enter-a-recession-trend-throughout-the-year/
JPMorgan predicts a US recession in 2025, citing the tariff policies announced by President Donald Trump鈥檚 administration. Michael Feroli, chief economist at JPMorgan, forecasts real GDP growth of -0.3% annually鈥攁 significant revision from their previous projection of 1.3%, attributing this decline to anticipated reductions in economic activity and job creation resulting from these tariffs.
On March 3rd, President Trump announced substantial tariffs on trade partners globally, triggering a notable decrease in S&P 500 index levels over two trading days, representing $54 trillion in lost market value. JPMorgan鈥檚 forecast is consistent with other international firms that have recently lowered their US economic growth projections following the tariff announcement; Barclays anticipates GDP contraction indicative of recession, while Citibank economists have reduced estimates to just 0.1%.
UBS chief economist Jonathan Pingle predicts a decline exceeding 20% in imports over his forecasting period, primarily within several upcoming quarters.
Michael Feroli further notes that market expectations previously anticipated interest rate reductions beginning in June, potentially reaching between 2.75% and 3%, but the implementation of Trump鈥檚 tariffs is likely to increase stagflationary pressures on the Federal Reserve due to a weakening labor market and potential slowdown in wage growth.
While Fed Chair Jerome Powell indicated no immediate need for interest rate adjustments following March's strong employment report, which demonstrated robust job creation despite a slight rise in unemployment, it remains unclear how monetary policy will adapt once Trump鈥檚 tariffs are fully implemented.
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On March 3rd, President Trump announced substantial tariffs on trade partners globally, triggering a notable decrease in S&P 500 index levels over two trading days, representing $54 trillion in lost market value. JPMorgan鈥檚 forecast is consistent with other international firms that have recently lowered their US economic growth projections following the tariff announcement; Barclays anticipates GDP contraction indicative of recession, while Citibank economists have reduced estimates to just 0.1%.
UBS chief economist Jonathan Pingle predicts a decline exceeding 20% in imports over his forecasting period, primarily within several upcoming quarters.
Michael Feroli further notes that market expectations previously anticipated interest rate reductions beginning in June, potentially reaching between 2.75% and 3%, but the implementation of Trump鈥檚 tariffs is likely to increase stagflationary pressures on the Federal Reserve due to a weakening labor market and potential slowdown in wage growth.
While Fed Chair Jerome Powell indicated no immediate need for interest rate adjustments following March's strong employment report, which demonstrated robust job creation despite a slight rise in unemployment, it remains unclear how monetary policy will adapt once Trump鈥檚 tariffs are fully implemented.
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