Nuveen Investment Management CIO Saira Malik wrote in a Monday report that the tariffs could add 2% to core personal consumption expenditures this year, as well as slashing economic growth by 1.7%.
“Unemployment, meanwhile, will likely rise 0.6% more than it would have without the tariffs,” Malik wrote.
The S&P 500 whipsawed on Monday, falling more than 4% before regaining 6.45% from session lows and then falling another 2%, all within the first hour of trading, in part in reaction to a false headline that the White House was considering a 90-day deferral on tariffs on all countries except China.
President Donald Trump said on Monday morning that he would apply an additional 50% tariff on Chinese imports if that country did not remove its own 34% reciprocal tariffs on U.S. imports by tomorrow. Such a levy would bring the total tariff rate on China to 104%.
The KBW Nasdaq Bank Index, which tracks the performance of U.S. listed bank stocks, fell nearly 16% since the announcement of reciprocal tariffs on U.S. trading partners.
Analysts continue to anticipate further negative consequences.
“Should these measures remain in place for a significant period of time, they could potentially shave 1 – 1.5 percentage points from growth this year—meaningfully raising recession risks—while adding a broadly similar amount to core PCE inflation,” wrote Brett Ryan, a senior U.S. economist at Deutsche Bank, in a note to clients.
Real U.S. gross domestic product grew 2.8% in 2024, according to data from the U.S. Bureau of Economic Analysis. The increase in real GDP in 2024 reflected increases in consumer spending, investment, government spending, exports and imports.