After Trump’s 90-Day Tariff Pause, Is a U.S. Recession Still Looming? Experts Remain Divided

Goldman Sachs economists triggered headlines on Wednesday by initially forecasting a U.S. recession due to new tariffs. But within hours, they reversed course. “We are now reverting to our previous non recession baseline forecast,” economist Jan Hatzius stated. The firm cited strong private sector balance sheets and an absence of deep financial imbalances as reasons for optimism.
Before Donald Trump announced a 19-day pause on tariffs, Goldman Sachs projected 65% chances of US recession within the next year. However, after Trump announced a pause on tariffs, Goldman Sach withdrew its recession warning in an updated note.

Citi Sticks to Slow Down

Contrasting Goldman’s shift, Citi analysts warned that the U.S. economy remains on a downturn path. The brokerage said Trump’s 90-day pause offers little relief, as tariffs on key sectors like autos and metals remain in place. Inflation risks and uncertainty over trade persist, prompting expectations of Federal Reserve rate cuts by mid-year.

JP Morgan Warns of Market Fallout

JPMorgan CEO Jamie Dimon voiced concern over growing recession risks, telling Fox Business, “Sweeping tariffs will likely lead to recession and credit defaults.” Dimon emphasized that rising rates, sticky inflation, and widening credit spreads could deepen the problem unless trade negotiations show quick progress.
Despite the temporary pause, JPMorgan has increased its estimate of a U.S. and global recession to 60%. As tariff negotiations continue with no clear endgame, markets remain jittery. The key question now is whether Trump’s tariff pause buys enough time — or merely delays the inevitable.

Read This Also: Why Did Trump Pause Tariffs for 90 Days—And What Comes Next?

China Still in the Crosshairs

While Trump extended a reprieve to most countries, China was hit with an unprecedented 125% tariff rate on its exports to the U.S., intensifying trade hostilities. This came after China retaliated with an 84% duty on American goods. Analysts fear this targeted pressure could prolong economic strain. Market volatility has already begun taking a toll on business activity. “IPOs are being canceled, and high-yield deals are stalling,” Dimon said. Dealogic data showed that U.S. mergers and acquisitions fell 13% in Q1, reflecting the drag from trade tensions.