Talk of a potential recession is growing, with uncertainty about President Donald Trump’s tariffs weighing on everyone’s mind.
Concerns about the impact tariffs will have on American businesses, consumers, retirement accounts and the economy have weighed heavily on stock markets in what has been a jaw-dropping and volatile few days.
Even the bond market hasn’t been immune, with prices tumbling and yields increasing, which is out of character when fears of a recession are rising. Fixed income is usually a place for investors to hide.
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It doesn’t help that the White House has been sending mixed messages.
After Trump vowed to maintain his tariffs on almost every country in the world, late Wednesday he capitulated, lowering tariffs to 10% for 90 days on all countries except China, which now faces tariffs of 125% (up from 104%). That sent stocks soaring, but uncertainty remains high.
What Wall Street and economists think of the prospects for a recession
A recession is not a foregone conclusion, but some Wall Street pros and economists are getting increasingly bearish.
Here’s what they have been saying in recent days. Keep in mind that things can quickly change during the 90-day reprieve President Trump just gave the world (except China).
“Probably it's (a recession) a likely outcome. Markets aren't always right, but sometimes they are right, and this time, they are right because they're just pricing in uncertainty at the macro level and uncertainty at the micro level, at the actual company level." — Jamie Dimon, chairman and CEO of JPMorgan, during an interview on Fox Business’ “Mornings With Maria” show.
“Most CEOs I talk to would say we are probably in a recession right now. One CEO specifically said the airline industry is a proverbial bird in a coal mine — canary in the coal mine — and I was told that the canary is sick already.” — Larry Fink, CEO of BlackRock, during an event at the Economic Club of New York.
"The combination of larger tariffs, greater policy uncertainty, declining business and consumer confidence, and messaging from the administration indicating greater willingness to tolerate near-term economic weakness in pursuit of its policies increase downside risk." — Goldman analysts wrote in a research report, raising the likelihood of a U.S. recession in the next 12 months to 45% from 35%.
“The U.S. tariffs will slam China hard, but China’s retaliation will also cream the U.S. economy. In any other time, this mutually assured economic destruction would forestall such a suicidal game of economic chicken, but President Trump and the Chinese appear dug in. This has quickly become about more than economics. It is about saving face. Brace for impact.” — Mark Zandi, Chief Economist at Moody’s Analytics.
“I’m watching consumer spending and job growth, especially in sectors that are sensitive to changes in the interest rate, like housing. If people start holding off big purchases, that’s a red flag. So far, the labor market has held up well, but another increase in inflation could ruin that.” — Jadrian Wooten, an economist at Virginia Tech.
“It’s more likely than not that we’re going to have a recession — and in the context of a recession, we’ll see an extra two million people be unemployed.” — Former Treasury Secretary Larry Summers, speaking to Bloomberg Television’s Wall Street Week.
“It (tariffs) pushes the economy, we would say, at least closer to a recession. If not, you are getting closer to the proverbial coin toss, because there is the potential for a lot of indirect effects on business confidence. Do they spend less and hire less and obviously we are seeing asset markets meltdown … and you could have negative wealth effects on the upper-income consumers. So the direct effects get you very modest growth, a little bit above zero. It’s the indirect effects that we are worried about.” — Morgan Stanley Chief U.S. Economist Michael Gapen during a tariffs roundtable podcast.
“If the new tariffs stay in place for multiple years, and are enforced and inflationary, and DOGE continues to cut and fire, we will be in a far worse situation than 2008.” — Mark Cuban, an American businessman and billionaire in a post on Bluesky.
“Our stock market is down. Bond yields are up, and the dollar is declining. These are not the markers of successful policy. I am receiving an increasing number of emails and texts from small-business people I do business with or have invested in, expressing fear that they will not be able to pass on their increased costs to their customers and will suffer severely negative consequences" — Bill Ackman, CEO of Pershing Square on X, before Trump reversed course on tariffs for most countries.
“This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.” — Ackman on X after Trump reversed course.
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