PIMCO Managing Director: Tariffs Raise the Probability of a U.S. Economic Recession to 35% This Year

ChainCatcher news, Alec Kersman, Managing Director and Head of Asia Pacific at Pacific Investment Management Company (PIMCO), stated that due to the implementation of tariff measures by the United States, the likelihood of the U.S. falling into an economic recession this year has increased, estimating the probability at 35%. This probability is higher than the 15% assessed by Pimco last December.

Nevertheless, Pimco's fundamental forecast for the U.S. economy is growth of 1% to 1.5%, although this is a "significant decline" from previous expectations. Kamal Bhatia, President and CEO of Principal Asset Management, stated that such trade policies will promote domestic consumption, helping the U.S. economy grow above expectations. Consumer spending on goods and services accounts for about two-thirds of U.S. GDP. Bhatia noted that the increase in domestic spending triggered by tariffs is "highly likely" to drive U.S. GDP to "perform better than expected."