ICYMI: Citi says tariffs a stagflationary shock to US economic system, 40-45% probability of recession

Feedback from Citigroup’s Chief Economist through a Reuters report ICYMI. In short:

• “Tariffs are a stagflationary shock to the U.S. economic system”
• 40% to 45% probability of recession
• expects Q2 GDP up, pushed by customers making purchases forward of tariffs coming into impact
• largest damaging influence on U.S. progress is predicted throughout H2
• market response to tariffs and Trump’s assaults on Federal Reserve chair Powell might have a long-lasting influence
• Trump’s assault on Powell reveals an “implicit admission of those damaging results” related to the tariffs
• Markets’ response for the reason that announcement of tariffs reveals a lack of confidence in U.S. insurance policies
• “Ought to we mark down estimates of actual GDP progress for the U.S. over the following three to 5 years? Possibly, if you happen to assume there’s a lasting structural injury to the economic system as a consequence of compromising of U.S. establishments”

***

These remarks from Cit got here earlier than the newest coverage reversals from Trump;

• Trump backing away from tariffs, backing away from firing Powell – will it final?
• Trump says he has no plans to Hearth Federal Reserve Chair Powell
• Trump says he’s going to be very good to China, they must make a deal

The Citi feedback shall be helpful to refer again to if/when Trump reverses once more.

***

Updating yen and euro:

This text was written by Aaron Cutchburt at www.ubaidahsan.com.



Source link