President Donald Trump is expected to announce significant tariffs on major trading partners this Wednesday (2 April), dubbing it ‘Liberation Day’. Last week, the president warned reporters that these tariffs “would start with all countries, so let’s see what happens.”
In response, Goldman Sachs economists Ronnie Walker, Alec Phillips, and David Mericle have raised their 12-month recession probability to 35%, up from the previous 20% estimate.
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According to Goldman’s economists, this updated forecast “reflects our lower growth baseline, the sharp decline in household and business confidence, and statements from White House officials indicating a greater willingness to endure short-term economic weakness in pursuit of their policies.”
Meanwhile, credit ratings agency Moody’s has significantly increased the odds of a recession beginning in 2025, from 15% to 40%, citing “disconcerting” economic data from the US, including a decline in consumer confidence, weak consumer spending, and persistent inflation.
Moody’s Chief Economist Mark Zandi commented, “The intensifying trade war and cuts from the Department of Government Efficiency (DOGE) are contributing to this, and with last week’s announcement of major tariff increases on vehicle imports and upcoming reciprocal tariffs, the situation is likely to worsen.”
On Friday (4 April), the US Bureau of Labor Statistics will release its monthly nonfarm payrolls report.