In the first quarter, the U.S. GDP decreased by 0.3% year-on-year, marking the first negative growth since the second quarter of 2022 and falling far short of market expectations. President Donald Trump quickly attributed the economic weakness to former President Biden, stating, "Our Country will boom, but we have to get rid of the Biden 'Overhang'" and implied that any poor performance in the second quarter should also be blamed on Biden.
In response, several major financial institutions have significantly lowered their economic forecasts for the U.S. this year, raising concerns about a potential "Trump recession."
International financial organizations have revised their U.S. economic growth predictions downward. The International Monetary Fund (IMF) reduced its forecast from 2.7% to 1.8%, highlighting trade tensions and policy uncertainty as major risks and warning that continued tariffs could slow global growth. Goldman Sachs downgraded its estimate to 0.5% at the end of April, cautioning that if tariffs expand further, the risk of recession could rise to 45%. UBS emphasized that tariff measures might lead to stagflation risks and hinder global economic performance.
In the first five months of this year, global financial markets have been impacted by a new round of tariffs initiated by the U.S., leading to significant capital outflows from dollar-denominated assets and resulting in weak performance for U.S. stocks. In contrast, Hong Kong stocks have seen a 12% increase this year due to attractive valuations and substantial inflows into safe-haven assets, outperforming most Asian and European markets. Analysts note that the tariff issues remain unresolved, suggesting that U.S. stocks could still face further declines.
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