Global Data Pod Global Data Pod Weekender: Turn of the screw
Apr 17, 2025
Bruce Kasman and Joe Lupton dive into the booming goods sector, yet caution around recession looms. They debate the potential fallout of increasing tariffs and the mixed signals from economic indicators. The impact of tax policy on GDP is scrutinized, alongside the unique challenges facing small businesses. They discuss global sentiment shifts and the squeezing effect of geopolitical tensions, particularly from the Ukraine conflict, on the economy. Overall, the conversation captures a landscape rich in uncertainty and complexity.
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Uncertain Timing of Recession
- The U.S. and global economies may enter a recession this year, but the timing is uncertain.
- First quarter data shows strong goods sector activity and global industrial production gains above average.
Tariff Increase Impact Nuances
- A 10% tariff increase on the rest of the world brings a significant tax increase, but may not alone trigger a recession.
- The previous 1% tariff increase had broader influences beyond tariffs themselves, such as sentiment and financial conditions.
Tariffs and Policy Uncertainty
- Tariff increases represent a sizeable economic shock through tax effects, sentiment, and global trade disruptions.
- Combined with other policy uncertainties and weaker support factors, these shocks push the economy towards recession.