Is US headed for a recession? Experts believe so
What's the story
After US President Donald Trump announced new tariffs on imports, Dow futures plunged 963 points, or 2.3%.
Meanwhile, S&P 500 futures dropped 3.4% and NASDAQ 100 futures fell 4.2%.
Trump's move sent the yield on US benchmark 10-year bonds to over 4.1%, reflecting fears of a rise in inflation and further economic downturn, possibly even a recession for the already struggling economy as per experts.
Economic forecast
Recession expected before year-end
David Rosenberg, the founder and president of Rosenberg Research, has warned the latest round of reciprocal tariffs has made a recession by the end of this year more likely.
Former Merrill Lynch's chief economist for North America, Rosenberg had predicted less than 1% economic growth for the US this year.
"Seeds of a recession between now and the end of year have been sown," he said after Trump's announcement on new duties on imported goods.
Impact
Tariffs could worsen inflation
Experts predict the new tariffs on imported items will likely raise costs for American consumers.
Spartan Capital Securities chief market economist Peter Cardilo said, "The inflation effects could get worse and we could be headed toward recession."
JonesTrading Institutional Services' Michael O'Rourke also warned Bloomberg these tariffs might further slow down an already decelerating US economy, and advised Trump to brace for retaliation from other countries.
Trade implications
Global trade and economic growth at risk
The rise in export costs to US owing to these tariffs, could further curtail global trade and impede economic growth across the globe. Rosenberg hinted that "we need the stock market to rollover seriously into a bear phase" as possible end to the trade war.