Economists slash U.S. growth forecasts, raise inflation forecasts

The United States is at risk of a recession this year after the Trump administration announced massive tariffs on global trading partners, with inflation likely to return to epidemic-era levels, Wall Street economists said. With the new import tariffs in mind, U.S. GDP is expected to grow by 0.6 percent in 2025, Nomura International said, with a key measure of underlying inflation rising to 4.7 percent. Barclays economists had a more pessimistic outlook for U.S. GDP, which is expected to contract by 0.1 percent, and a slightly more optimistic forecast for inflation, which is expected to rise by 3.7 percent. They also expect unemployment to climb before the end of the year. Trump's tariffs announced on Wednesday threw the global financial marekt into disarray, upending predictions of continued expansion in the world's largest economy. Several major banks offered preliminary estimates of the impact, suggesting it would deal a major blow to economic growth and push up inflation, but they declined to make formal revisions, saying the measures were likely to moderate in the coming days.