Still, analysts continue to raise the alarm about the impact from Trump’s economic policies.
A new survey of 14 economists interviewed by CNBC now predicts first quarter gross domestic product — the value of all goods and services produced in the United States — will rise 0.3%. In the first quarter of 2024, GDP rose 2.4%.
Economists at Goldman Sachs on Sunday downgraded their first-quarter GDP estimate to just 0.2%, stating they expected tariffs to be “more aggressive” than what may have been assumed. The firm now expects GDP for the entire year to be just 1.5%, down from 2%; and has raised the odds of a recession to 35% from 20%.
Goldman said the change reflected “the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies.”
The firm also downgraded its expectations for how much S&P 500 companies would earn this year due to “higher tariffs, weaker economic growth, and greater inflation than we previously assumed.” The bank sees the broad-based index ending the year around 5,700, only about 120 points higher than where it was trading Monday.
At Deutsche Bank, economists estimate that Trump’s tariffs, if kept in place, would raise the U.S.’ tariff rate to “the highest since WWII.”
Last week, Trump announced his intention to impose tariffs on all autos and auto parts imported into the U.S. While details on the implementation of the duties remain to be worked out, the announcement caused shares in auto firms to plunge — and the sell-off continued Monday, with shares in General Motors down 1.3% and 1.1%. Stellantis, which now owns the Chrysler Group’s brands such as Dodge, Jeep and Ram, were down nearly 3%.
In a note to clients published Monday, Dan Ives, managing director at Wedbush Securities, said Trump’s automobile tariffs plans “will cause pure chaos to the global auto industry” while raising the cost of a typical vehicle sold in the U.S. by as much as $10,000.
“We reiterate that the concept of a U.S. car maker with parts all from the US is a fictional tale that does not exist and would take years to make this concept a reality,” Ives said.
Unlike his first term, the president has shown far less willingness to respond to investors’ concerns and market actions. Trump has mostly waved away the major resistance his tariffs plan has met in the business community and rising expectations among businesses and consumers alike for an economic downturn as a result of the new duties.
In an exclusive interview with NBC News on Sunday, Trump said he “couldn’t care less” if automakers raise their prices due to tariffs.
Later Sunday, he was asked about the rising threat of stagflation — faster inflation amid lower growth, a scenario that a growing number of analysts have said has begun to emerge.
“I haven’t heard that term in years,” he said. “I don’t know anything about it. … This country is going to boom. We’re going to have boomtown. We’re going to boom.”
The Trump administration remains undeterred. In weekend remarks, Vice President JD Vance repeated Trump’s contention that the U.S. had turned into the world’s “piggy bank” while stating, inaccurately, that middle-class wages have declined.
“The days of closed factories, the days of people not being able to get a middle-class job in this country, they’re over,” Vance said.
