Economists See Greater Chance of Recession With Trump's Tariffs

Key Takeaways

• Economists are increasing their forecasts on the probability of a recession in the aftermath of President Donald Trump's tariffs.
• However, most do not think it's the most likely case yet.
• Tariffs alone will likely not tip the economy into a recession but if trading partners retaliate and consumers stop spending, a downturn could be ahead.

Economists are increasing their forecasts on the probability of a recession after President Donald Trump announced broad tariffs on trading partners last week.

However, that doesn't mean that a recession is the most likely outcome yet.

Economists' projections vary on how likely a recession is in the coming months. Before the tariffs were announced, the chances of a recession were low, many economists believed. Now that tariffs threaten to increase inflation and jeopardize economic growth, a recession has become more likely, but is not yet inevitable.

"There's always an unconditional possibility of a recession. It might be broadly in the range of one in four at any time," Federal Reserve Chair Jerome Powell said in a press conference after the last central bank policy meeting. "So the question is, whether, in this current situation, those possibilities are elevated."