Catherine Arnst
Like the gyrations in the stock market, economists have gone back and forth on recession predictions. A year or so ago there was a broad consensus among experts that there would be a recession in 2024 — but it never materialized. By this year, amid strong a strong job market and cooling inflation, such talk had died down.
Then President Donald Trump ignited a trade war, and the recession talk roared back, louder than ever. Ever since Trump first announced earlier this month that he would raise tariffs on almost every country in the world, more and more expert voices have joined the recession chorus.
Morgan Stanley (MS) places the odds of a recession this year at 40%, Goldman Sachs (GS) thinks the likelihood is 45%, and the cautious International Monetary Fund puts the chance of a U.S. recession at 40%, up from 25% last October.
There’s more. JPMorgan Chase (JPM) has said the chance of a recession this year is 65%, renowned Wall Street economist David Rosenberg thinks the odds are as high as 85%, and Torsten Slok, chief economist at Apollo Global Management (APO), calculates the chances of what he calls a “voluntary trade reset recession” at an almost certain 90%. Ray Dalio, the billionaire hedge fund manager of Bridgewater Associates, said recently that he’s worried about “something worse than a recession” because of the trade war.
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