President Trump's New Reciprocal Tariffs Are Predicted to Trigger a U.S. Recession

Global markets, including equities and crypto, are experiencing significant volatility and downturns.

President Trump's new reciprocal tariffs are predicted to trigger a U.S. recession by late 2025, with rising inflation and unemployment.

Global markets, including equities and crypto, are experiencing significant volatility and downturns.

Experts are advising investors to consider safe-haven assets like gold and Bitcoin amidst the predicted economic instability.

The US economy is heading into rough territory, as major bank JPMorgan predicts a recession by the end of 2025. The main culprit? President Trump’s aggressive new reciprocal tariffs.

These tariffs are designed to fix long-standing trade imbalances by targeting countries with large trade surpluses against the US, such as India. More tariff hikes are reportedly on the way.

JPMorgan predicts that the US GDP will contract in 2025. Michael Feroli, the bank’s chief US economist, warns that the pressure from these new tariffs could push the country into a recession.

During the downturn, unemployment is expected to rise to 5.3%, and the administration’s efforts to lower the deficit will likely be stalled.

Fed Chair Jerome Powell also expressed concern, saying the tariffs could impact the economy more than expected.

Larger tariffs would likely lead to higher inflation and slower growth, while smaller tariffs might spur some improvement in the economy.

JPMorgan expects inflation to reach 4.4% by the end of the year, up from 2.8% in February. The bank believes the Fed will start cutting interest rates in June and continue gradually until January 2026, eventually lowering rates to 2.75%-3%.

However, Powell has suggested a more cautious approach, saying there’s no need to rush despite the growing pressure.

Also Read: Robert Kiyosaki Says the Market Crash Is Just Getting Started, Here’s What Next?

Global Markets Take a Hit as Tariffs Spark Reactions

The global economy is now feeling the pressure of America’s trade war. China has already responded by imposing a 34% tax on US goods, threatening to escalate the trade war further.

Other countries are either threatening to retaliate or preparing for tough negotiations.

China’s move shook the markets, triggering a major sell-off. Trump’s trade war has already wiped out more than $5 trillion from the US stock market.

And JPMorgan isn’t alone in sounding the alarm. Barclays expects a downturn next year, Citi sees just 0.1% growth, and UBS has cut its forecast to 0.4%.

Canadian Prime Minister Mark Carney criticized the US for backing away from its global leadership role.

“The world economy is different today than it was yesterday,” he said while announcing new countermeasures from Canada.

The crypto market dropped sharply after Trump’s tariff announcement, as investors looked for safer options like gold.

Bitcoin briefly touched $88,500 before falling below key support levels. Major altcoins like XRP, Solana, and Dogecoin dropped as much as 4.5%. US crypto-related stocks also fell due to the sweeping tariff policy.

Fear, uncertainty, and doubt (FUD) are growing in the crypto market. Since February 1, Bitcoin has dropped 10%, and Ethereum is down 20%, as worries about the impact of tariffs on blockchain growth and adoption persist.

However, XRP rose 2% after the SEC officially dropped its case against Ripple, bringing some relief to investors who have endured years of regulatory uncertainty.

The market is divided on how Bitcoin will perform in this environment. Some see it as “digital gold,” a hedge against inflation and instability.

If the Fed cuts interest rates, Bitcoin could benefit from increased liquidity. With more financial risk in the system, many investors may turn to Bitcoin as a store of value.

However, if the economy deteriorates quickly, traders might prefer safer assets like U.S. bonds over cryptocurrencies.

Bitcoin’s next moves depend largely on how the Fed handles inflation and the broader economy. While rate cuts could boost Bitcoin by adding liquidity, worsening economic data could pull prices down.

Analyst Alex Krüger says Bitcoin’s future will be shaped by monetary policy decisions and signs of a recession, with market volatility expected as traders respond to new data.

During a recession, consumer spending and liquidity tend to fall—two key drivers for crypto growth. While Bitcoin has strong support from ETF approvals and institutional interest, it still needs fresh capital to move higher.

To understand where Bitcoin is headed next, investors are watching two main factors: the stock market and global liquidity.

If stocks continue to fall, Bitcoin is likely to follow. But if equity markets stabilize, Bitcoin might get the push it needs to climb back toward its all-time highs.

Investors are also tracking liquidity indicators like the Fed’s balance sheet (WALCL) and the M2 money velocity (M2V), which shows how much money is moving through the economy.

With the Fed’