Global brokerage and economists have warned of recession in the US in the future keeping in mind the impact of reciperochl tariff declared by Donald Trump administration. According to JP Morgan Chase & Company, “We expect the actual GDP estimate cut under the weight of the tariff and now expect the actual GDP growth -0.3 percent for the whole year, which was earlier 1.3 percent.”
The bank’s chief American economist Michael Feroli said in a note to customers that an estimated decrease in economic activity can cut hiring and the unemployment rate will increase by 5.3 percent over time. Contraction means a bicycle phase that declines the overall economy. Feroli hopes that the US Federal Reserve will start its benchmark interest rate cut in June and will continue to cut rates in each next meeting by January next year.
Feroli wrote, “If this comes true, our forecast will create a dilemma for Fed Policy makers.” City economists have reduced their forecast for growth rate to just 0.1 percent this year, while UBS economists have reduced the forecast to just 0.4 percent.
In a note, US importance from UBS chief American economist Jonathan Pingal said, “American imports from other countries of the world will decrease more than 20 percent in our forecast time, especially the next several quarters, which will return to the level before 1986 as part of the GDP.” He estimated that “the rigor of trade policy action would mean the macroeconomic adjustment for the 30 trillion $ 30 -dollar economy”.
On Friday, Fed Chairman Jerome Powell said that we do not need to hurry for any adjustment at the rates. His comment came after the release of the latest monthly employment report of the Labor Statistics Bureau, which showed a slight increase in unemployment rate along with strong recruitment in March.
Meanwhile, Trump’s reciperook Tariff promoted heavy selling on Wall Street, with Dow Jones falling more than 2,000 points, S&P 500 saw its worst two -day selling since March 2020 and entered the Nasdaq Beer Market area.
