Catenaa, Tuesday, April 22, 2025– US recession odds have increased by a minimum of 37% through analysis given by investments firms and IMF due to US trade tariffs and trade war with China.
Citigroup’s Chief Economist Nathan Sheets said on Tuesday the U.S. has a 40% to 45% chance of recession.
Sheets told clients in a conference call that he expects GDP to grow in the second quarter, pushed by consumers rushing to make purchases ahead of tariffs coming into effect.The largest impact on US growth is expected during the second half of the year,
The Trump administration announced reciprocal tariffs against 180 countries earlier this month, then paused for 90 days, but increased the tariffs on China by 145%.
Sheets said Trump’s recent attack on Powell for not cutting interest rates preemptively shows an “implicit admission of these negative effects” associated with the tariffs.
He said the extent to which US policies change depending on the administration in charge may create instability in the longer term.
Meanwhile, the IMF said that US economic growth will come in at just 1.8% this year, down sharply from its previous forecast of 2.7% and a full percentage point below its 2024 expansion.
The IMF doesn’t expect a US recession, though it has raised its odds of one this year from 25% to 37%.
The IMF said that the global economy will grow just 2.8% this year, down from its forecast in January of 3.3%, according to its latest World Economic Outlook. And in 2026, global growth will be 3%, the fund predicts, also below its previous 3.3% estimate.
Economists at JPMorgan say the chances of a US recession are now 60%.
Since April 02, the S&P 500 has come down by 412 points and Dow Jones Industrial Average by 3048 points.
