Economists and institutions are increasingly converging on starker warnings of a US recession by 2025, with some reinforcing dire predictions of a dollar crisis and systemic instability.

The possibility of a US recession in 2025 has sparked heated debate among economists, financial institutions, and policymakers, with forecasts divided between warnings of an impending economic downturn and projections of continued growth. At the heart of this discussion are conflicting interpretations of trade policy, market indicators, and the resilience of the US dollar.

A recession is typically defined as two consecutive quarters of negative GDP growth, although the National Bureau of Economic Research (NBER) also considers broader factors such as employment levels and industrial production. As of March 2025, the economic landscape remains uncertain. President Donald Trump's tariff policies, along with fluctuating consumer confidence and market volatility, have heightened concerns about recession risks.

Economist Peter Schiff, CEO of Euro Pacific Capital, has emerged as the most vocal proponent of a 2025 recession. Schiff recently warned of a looming US dollar crisis that could devastate the economy, triggering increases in consumer prices and long-term interest rates. His prediction hinges on a collapse in confidence in the dollar, which he believes is overvalued and vulnerable to a sharp correction. Unlike many of his colleagues, Schiff's stance is absolute, insisting that a recession is inevitable rather than merely probabilistic.

Other experts take a more measured approach. Bruce Kasman, JPMorgan's global chief economist, gave a 40% chance of a recession in 2025, citing risks from trade policy and potential damage to the US's prerogative as the global reserve currency. Similarly, Yardeni Research, led by economist Edward Yardeni, raised its recession odds to 35% in March 2025, noting growing anxiety but not being definitive. Both emphasized that the economic outlook remains highly uncertain.

In contrast, the Federal Reserve's March 2025 projections painted a brighter picture, predicting GDP growth of 1.9% for that year. The Fed's baseline scenario dismissed recession concerns, pointing to stable employment levels and industrial output. However, the GDP Now model predicted a potential 1.5% contraction in Q1 2025, sparking brief concerns. Officials cautioned that one quarter of negative growth does not equate to a recession, although it underscored the fragility of the current forecast.

UCLA Anderson's forecasts have linked recession risk directly to policy outcomes. Economist Clement Bohr warned in March 2025 that the full implementation of Trump's proposed tariffs and federal job cuts could trigger a contraction across sectors. Meanwhile, analytics firm Expana predicts a global recession beginning in the spring of 2025, driven by a synchronized slowdown in major economies. Goldman Sachs and Morgan Stanley have also lowered their US growth projections, although their recession odds remain lower.

Moody's Analytics chief economist Mark Zandi highlighted the rise in mortgage payment delays among homeowners with loans backed by the Federal Housing Administration as a potential red flag. Meanwhile, the Conference Board's Consumer Confidence Index fell sharply in early 2025, reflecting declining near-term expectations for income, business conditions, and employment. Financial institutions such as HSBC, Citi, and Barclays have downgraded their outlooks for US equities, citing uncertainty about tariffs and their impact on corporate earnings.

Trump's policies play a significant role in the recession debate. His administration's proposed and implemented tariffs on imports, coupled with federal job cuts, have drawn criticism from economists who argue these measures could hinder trade, raise consumer prices, and erode business investment. The CNBC CFO Council reported that 60% of financial executives surveyed see policy uncertainty under Trump as a major driver of the recession, with many bracing for supply chain disruptions.

A Deutsche Bank survey put the probability of a US recession within 12 months at 43%, while Harvard economist Kenneth Rogoff estimated a 30-35% chance, attributing the risk to spending cuts and the impact of tariffs. Jeffrey Gundlach of DoubleLine Capital offered a more pointed view, putting the probability at 50-60%. The growing consensus among economists and institutions sounding the alarm about the threat of a 2025 recession points to deepening wisdom as tectonic pressures—from dollar volatility to fracturing supply chains—anchor current discussions.

While the US central bank remains cautiously optimistic, cautious notes from figures like Schiff, Yardeni, and Expana, along with major financial institutions, highlight concerns that policy mistakes and declining consumer confidence could fuel instability. Their collective caution reflects an economy teetering on the edge of adaptability and structural stress. As authorities like Gundlach, Rogoff, and Moody's increasingly warn of recession, the economy's path to 2025 increasingly depends on agile policies facing mounting challenges.

Tariffs, fiscal contraction, and a global slowdown form a dangerous trident that even optimistic projections can't easily ignore. With organizations revising growth forecasts downward and families bracing for uncertainty, the discussion now revolves not around whether a crisis will emerge, but rather how much geopolitical shocks and legislative decisions could trigger a contraction.

Source: Bitcoin.com news

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