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US: Bracing for impact
Last month, after running a range of trade war scenarios in a global macroeconometric model, we concluded that the probability of a recession in the US was larger than 50% (for details about the scenarios and the simulation outcomes, see A Tariff-Induced Recession?). In each scenario, the US economy contracted in Q3. Therefore, our recession forecast seems robust to a wide range of scenarios. The same is true for the rebound in inflation and the rise in unemployment. However, the depth and length of the recession depends on which scenario materializes. chart Trade negotiations are still in a state of flux, but ... (full story)
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