The imposition of new tariffs by the United States is projected to negatively impact economic growth, leading financial institutions to increase their assessments of a potential recession. While the Federal Reserve refrains from providing a specific recession probability forecast, Chairman Jerome Powell acknowledged that external forecasters have elevated their estimates, albeit from previously low levels. Goldman Sachs, for example, has significantly increased its recession probability forecast from 20% to 45% following the implementation of tariffs. JPMorgan Chase has also revised its projections upward, estimating a 60% probability of both a US and global recession. These institutions cite disruptive US policies as a primary risk to the global economic outlook. JPMorgan Chase further noted that the US economy faces significant headwinds, balancing the potential benefits of tax reforms against the detrimental effects of tariffs and trade disputes.
