Wall Street’s Jitters and the Recession Clock
The aftershocks aren’t just diplomatic—they’re economic. JPMorgan Chase estimates there’s a 60% chance of global recession, while Goldman Sachs raised its prediction from 35% to 45%. For investors, the red flags are multiplying.
Risky assets have already started their descent. The U.S. dollar has lost value, and U.S. equities are feeling the heat. Hedge funds, sensing the incoming storm, de-risked portfolios ahead of the April 2 bombshell, a move that shielded them—barely—from the worst of the blowback.
“While the margin calls faced by funds following April 2 had been significant, they had so far been able to meet them without taking actions which would further amplify the market liquidity,” the Bank of England noted.
Tariffs vs. Deficits: A Double-Edged Sword
Fitch Ratings, weighing in Tuesday, acknowledged that tariff revenue may offer a short-term boost to the U.S. budget, potentially trimming the deficit. But they also warned that any fiscal gains would be undercut by a weakening economy—and further complicated by the likely extension of the Tax Cuts and Jobs Act.
Meanwhile, as markets absorb the fallout, Washington remains tight-lipped. The U.S. Department of the Treasury did not immediately respond to requests for comment.
