This year could be catastrophic for the US economy. Wall Street experts bring forward scary forecasts. Indeed, many such gloomy forecasts are based on fertile ground. Nevertheless, America must strive to overcome these hardships.

The risks of a recession in the US have resurfaced after a prolonged period of inflation, high interest rates, and economic uncertainty. The fallout of a potential recession will be alarming. Such prospects intensify the pessimism among market participants and analysts.

The negative mood regarding the potential onset of a recession is fueled by the political and economic actions taken by US President Donald Trump. Primarily, it is about the lofty import tariffs on long-lasting trade partners. Besides, experts cite significant cuts in government spending and mass layoffs of federal employees. Markets view these actions by the Trump administration as obstacles to economic growth this year.

According to Polymarket's estimates, the chances of a recession in the US in 2025 have increased to 32%. Interestingly, this figure stood at 23% at the end of February. Thorsten Slok, an economist at Apollo, says that the likelihood of a recession has risen globally. It threatens not only the United States but also Europe and the United Kingdom. Meanwhile, financial markets are in turmoil due to the unpredictability of the US administration. A significant risk is that policy uncertainty could entail a sharp slowdown in the economy. In such a situation, consumers cut back on car purchases, stop going to restaurants, and refrain from taking vacations. As for companies, they stop hiring employees and abandon capital investments, Thorsten Slok explains.

Currently, households have to slash their budget. In February 2025, consumer sentiment fell to its lowest level in the past two years, specifically since November 2023. Jeffrey Solomon, president of TD Cowen, says that Trump's tariffs have already put a strain on households. The analyst defines the policies of Trump’s administration as the catalyst for a recession in the US. The economy will dive into this depth in the second half of 2025. Moreover, the US faces increasing risks for business activity. This is happening amid uncertainty related to tariffs, Jeffrey Solomon warns.

This stance is shared by currency analysts at BCA Research. According to their forecasts, the US economy will enter a recession in the second quarter of 2025. The reason is a sharp decline in consumer activity. Such assumptions are confirmed by the Federal Reserve Bank of Atlanta's forecast. According to its estimates, the US GDP will shrink by 2.8% in the first quarter of this year. This is a pessimistic forecast, as the bank had predicted a 4% growth in forecasts in early 2025.