Financial markets are signaling that the risk of a recession is growing as tariff-related uncertainty and indicators of economic weakness spread fear across Wall Street.
Wall Street banks are highlighting a growing risk of a recession, as financial markets reflect heightened concerns due to tariff-related uncertainty and indicators of economic weakness. The recession probability has risen to 23% from 14% in January, with experts like Mohamed El-Erian now estimating a 25-30% chance. JPMorgan's analysis, using metrics such as asset class comparisons, suggests a 50% recession probability. Market indicators, including the VIX and yield curve shifts, also point to increased risk. These concerns are fueled by President Trump's tariffs, which have caused market volatility and weakened business and consumer confidence. Additionally, fears of stagflation are emerging, with signs of slowing growth and elevated inflation.
