US Recession Monitor – Economy at risk despite de-escalation
From tariff threats to rising interest rates, mounting pressures signal growing challenges for US economic stability.
De-escalation in the US trade war over the past month reduced the odds of a recession this year.
However, subsequent tariff threats against the EU highlight that policy uncertainty won’t abate anytime soon, weighing on economic growth this year.
Borrowing costs for households and businesses are on the rise at a time when banks are starting to tighten lending standards, driven by a higher risk premium and decreased market rate-cut expectations.
We’re most concerned about small businesses that have less access to credit and will have a harder time dealing with higher input costs due to tariffs. As demand declines, many of these businesses will be forced to curtail hiring or lay off workers.
