Mark Zandi, chief economist at Moody’s Analytics, explains why he believes the US will face a recession in weeks if President Donald Trump’s trade war continues. #CNN
Top economists are expressing growing concern over the uncertainty surrounding President Trump’s tariff policies, warning of significant risks to the U.S. economy.Latest news & breaking headlines
📉 Economic Risks and Forecasts
- Goldman Sachs CEO David Solomon has highlighted “material risks” from the escalating trade war, noting increased market volatility and a reduction in the bank’s U.S. growth forecast to 0.5% for the year. He also raised concerns about a heightened chance of recession .Latest news & breaking headlines+1Barron’s+1
- Former Treasury Secretary Janet Yellen criticized Trump’s tariff policies as “misguided,” warning that they are eroding trust in U.S. economic commitments and financial assets. She emphasized that such policies could isolate the U.S. and push traditional allies toward closer ties with China .Reuters
- Nobel Laureate James Heckman expressed that the uncertainty surrounding Trump’s trade agenda appears to be pushing the country into a recession .Newsweek
🛍️ Consumer Behavior and Market Impact
The uncertainty has led to notable changes in consumer behavior, with Americans engaging in “doom-buying” of non-perishable goods like coffee, olive oil, and soap in anticipation of price hikes due to tariffs . Additionally, the auto industry is experiencing a surge in sales as consumers attempt to purchase vehicles before potential price increases.MarketWatch
📊 Market and Business Sentiment
Major financial institutions like Morgan Stanley and Citi have slashed earnings estimates, citing the “abject uncertainty” caused by volatile U.S. trade policies. This has led to a shift in Wall Street sentiment from optimism to deep uncertainty, with some companies withdrawing financial guidance and economists warning of a possible recession .Barron’s
In summary, the prevailing uncertainty surrounding President Trump’s tariff policies is causing concern among top economists, affecting consumer behavior, and leading to cautious forecasts from major financial institutions.