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New Delhi, April 5: Global brokerages and economists have warned an impending US recession after factoring in the impact of reciprocal tariffs announced by the Donald Trump administration. According to JPMorgan Chase & Co, “We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3 per cent, down from 1.
3 per cent previously,” The bank’s chief US economist Michael Feroli said in a note to clients that the forecast contraction in economic activity is expected to depress hiring and over time to lift the unemployment rate to 5.3 per cent. US Tariff: Mutually Beneficial India-America Trade Deal To Limit Tariff Impact, Says Report.
Feroli expects the US Federal Reserve to begin cutting its benchmark interest rate in June and proceed with rate cuts at each subsequent meeting through January next year. “If realised, our stagflationary forecast would present a dilemma to Fed policymakers,” Feroli wrote. Citi economists have cut their forecast for growth this year to just 0.
1 per cent while UBS economists reduced their forecast to a mere 0.4 per cent. UBS Chief US Economist, Jonathan Pingle, said in a note that “We expect US imports from the rest of the world fall more than 20 per cent over our forecast horizon, mostly in the next several quarters, bringing imports as a share of GDP back to pre-1986 levels.
” “The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy,” he projected. On Friday, Fed Chair Jerome Powell said “it feels like we don’t need to be in a hurry” to make any adjustments to rates. His comments followed the release of the latest monthly employment report from the Bureau of Labor Statistics, which showed robust hiring in March alongside a slight uptick in the unemployment rate, to 4.
2 per cent. Donald Trump Imposes 10% Universal Tariff, India To Face ‘Discounted’ 26% Tariff From US, Check Full List Here. Meanwhile, Trump's reciprocal tariffs triggered a massive sell-off across Wall Street, with the Dow Jones plunging over 2,000 points, the S&P 500 witnessing its worst two-day sell-off since March 2020 and the Nasdaq entering the bear market territory.
(The above story first appeared on LatestLY on Apr 05, 2025 11:31 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com ).
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