U.S. stocks are continuing to struggle on Tuesday amidst concerns that President Donald Trump’s tariffs could lead to a recession this year.  

According strategist, Peter Berezin of BCA Research, there’s a 75% probability of the economy sliding into a recession by the end of the first half of 2025. 

In a recent report, Berezin warned “consensus estimates understate the impact on economic activity from the trade war and DOGE cuts.”

In total, the benchmark S&P 500 Index ($SPX) has lost nearly 8% over the last month and nearly 5% so far in the year to date. 

Why Trump Tariffs May Lead to a Recession

Berezin expects new tariffs to result in a resurgence in inflation, making it more difficult for the Federal Reserve to consider cutting its key interest rate any further in 2025. 

For businesses, the new tariffs will mean uncertainty, and for consumers, they’ll mean a hit to real incomes this year. Put together, the Trump tariffs are a recipe for a demand slowdown, which may lead to an all-out recession in the coming months, according to the BCA strategist. 

Berezin even sees the United States currently at “greater risk of a recession than it was in early 2022” since job openings and excess savings were shielding the economy from slowdown at the time. 

Moody’s Also Sees a Recession Ahead

Mark Zandi, chief economist of Moody’s, also warned of a potential recession ahead in a recent interview with ABC News. 

While he pegged the chances of an economic slowdown at about 35%, much lower than BCA’s estimate, Zandi nonetheless dubbed the probability “uncomfortably high” particularly because “it’s rising” over time.

On the flip side, Gregory Daco of EY Parthenon does not currently see immediate signs of a recession in 2025. However, the private sector activity has cooled off recently, he agreed in a CNBC interview in late February. 

What a Recession May Mean for the S&P 500

According to BCA’s Berezin, a potential recession in the coming months could prove to be dire for the S&P 500 this year. 

His year-end target on the benchmark index currently sits at 4,450, which indicates potential downside of another 20% from current levels.