Economic experts are increasingly warning about recession risks in the US economy two months into Donald Trump’s presidency. Major financial institutions have significantly raised their recession probability estimates—JP Morgan now forecasts a 40% chance (up from 30%), Moody’s Analytics projects 35% (up from 15%), and Goldman Sachs has increased its estimate to 20% (from 15%).
These assessments come as the S&P 500 has fallen to its lowest point since September, reflecting growing investor concern. The market instability primarily stems from Trump’s implementation of tariffs on imports from America’s three largest trading partners, with threats of more to come. Despite inflation cooling to 2.8% in February (down from 3% in January), businesses are facing uncertainty that’s affecting investment and hiring decisions. Trump’s administration has begun warning Americans to expect economic challenges ahead—a notable departure from his campaign promises of prosperity and his first-term tendency to use stock market performance as a measure of success. Analysts like Brian Gardner from Stifel note that what initially appeared to be negotiating tactics now seems like “a restructuring of the American economy,” creating significant market anxiety.