The latest Wall Street Journal economist survey shows that just three months into Trump's presidency, his aggressive tariff policies have caused a sharp decline in the outlook for the US economy. Economists have halved their 2025 GDP growth forecast from 2% to 0.8%, with the probability of recession soaring from 22% to 45%, and inflation expectations rising to 3.6%. The economic storm triggered by the "Liberation Day tariffs" is changing the fundamentals of the US economy at an unimaginable speed.

1、 Economic forecast 'plunge': recession warning sounded

The latest economic data shows that the growth prospects of the US economy are rapidly deteriorating. According to a survey of 64 economists by The Wall Street Journal, the expected GDP growth rate for the fourth quarter of 2025 has been significantly lowered from 2% in January to only 0.8%. If the forecast comes true, this will be the worst economic performance since the 2020 pandemic. What is even more worrying is that economists have significantly raised the probability of an economic recession in the next 12 months from 22% to 45%, with Vanguard Chief Economist Joseph Davis stating that the US economy is "hovering on the brink of recession". The market reaction has been more intense: the stock market has experienced a sell-off, bond yields have soared, and a survey by the University of Michigan shows that consumer confidence has fallen to its lowest level in a decade.

2、 The roller coaster of tariffs: repeated policy impacts on global supply chains

The Trump administration's tariff policies have fluctuated like a roller coaster, causing huge chaos in the market. On April 2nd, Trump suddenly announced a general 10% base tariff on imported goods and implemented higher equivalent tariffs on some countries; On April 9th, just one week later, it was announced to suspend equivalent tariffs for 90 days; On April 11th, tariff exemptions will be implemented again for electronic products. This constantly changing approach has left economists at a loss, with record differences in predictions - the range of GDP growth forecasts for 2025 ranges from a pessimistic 2% decline to an optimistic 3.1% growth. Economists at California Lutheran University admit that their predictions are entirely based on the assumption that tariffs will be adjusted. The business community is even more mired in survival anxiety, with supply chain problems erupting in concentration. The CEO of JPMorgan Chase stated that many companies have suspended long-term planning.

3、 Inflation+unemployment 'double kill': the Federal Reserve is caught in a dilemma

This tariff storm is creating a stagflation dilemma. Economists predict that by the end of 2025, the year-on-year increase in CPI will reach 3.6%, far exceeding the 2.7% forecast in January, and the average tariff rate may soar from the original 2.4% to 21.4%. At the same time, the job market will also significantly cool down, with the expected year-end unemployment rate raised from 4.3% to 4.7%, and it is still difficult to improve in 2026. This puts the Federal Reserve in a dilemma: although the market expects to cut interest rates twice in 2025, inflationary pressures may force the central bank to postpone action. Former Federal Reserve officials warn that current policies are repeating the mistakes of the 1970s.

4、 Global shock wave: Who is paying for tariffs?

The impact of this storm has already surpassed the borders of the United States. The US dollar index fell to a three-year low, the de dollarization process accelerated, and safe haven funds flooded into the gold market, pushing spot gold prices above the $3200 mark. The US Treasury market has been hit by a 'major earthquake', with 10-year yields recording the largest weekly increase since 2001, and foreign investors continuing to withdraw. Geopolitical risks are also piling up. Events such as Iran's nuclear negotiations and the Russia-Ukraine conflict continue to ferment. Blackstone Group warns that the world is entering the era of "de globalization 2.0".

Conclusion: A Game Without Winners

Trump's tariff policy is pushing the US economy into a dangerous situation. From the trading floors of Wall Street to ordinary shops on Main Street, from multinational supply chains of businesses to daily bills of households, the shock wave of this' tariff storm 'is unfolding in all directions. What is even more worrying is that the volatility of policies has caused the market to lose its judgment coordinates - as one economist involved in the survey said, "How can we make accurate predictions when the president himself doesn't know what to do next?" As the probability of a recession approaches 50%, consumer confidence collapses, the Federal Reserve's policy space is compressed, and the US economy may be standing on the edge of the "stagflation" cliff. This crisis caused by tariffs may eventually require all Americans to pay for it. The only certainty is that the market turbulence is far from over until policy clarity is achieved.