Week Ahead: Economic Data Releases, Trade Tensions, and Recession Risks!

Global markets face turmoil as trade tensions between the U.S. and China reach new heights. President Trump's April 2nd announcement of reciprocal tariffs, followed by partial delays and exemptions, has created significant volatility.

Trump raised tariffs on Chinese imports to 145%, excluding electronics temporarily. Beijing retaliated with 125% tariffs on U.S. goods, warning of further countermeasures while reducing American film showings and discouraging U.S. travel.

Economists warn these tariffs could effectively halt trade between the world's largest economies and potentially reduce GDP growth by over 1% in both countries. Major financial institutions now forecast minimal or negative U.S. growth for 2025.

The dollar has fallen to its lowest level since February 2022, with 80% of economists expecting further weakening. Meanwhile, gold reached a record high above $3,245 per ounce, with Goldman Sachs revising its year-end forecast to $3,700.

U.S. consumer sentiment dropped to near-historic lows, with inflation expectations surging to their highest since 1981. Americans now anticipate 6.7% price increases over the next year and 4.4% long-term inflation.

Federal Reserve officials remain cautious, with NY Fed President John Williams predicting tariffs could push U.S. growth below 1%, unemployment to 4.5-5%, and inflation to 3.5-4%. Despite market expectations for three rate cuts this year, the Fed appears unlikely to act until economic effects become clearer.

The upcoming week features critical economic data releases including Chinese GDP, U.S. retail sales, and interest rate decisions from Canada and the ECB.