Tariffs Trigger Turbulence: S&P Global Reviews Global Economic Projections

S&P Global is reassessing its economic forecasts following President Trump's new trade tariffs. The adjustments may lead to credit score downgrades. While inflation in the U.S. might rise, global growth could slow, especially in open economies. The probability of recession in the U.S. has increased to 30%-35%.

In a significant economic update, credit ratings leader S&P Global has announced a comprehensive review of its macroeconomic forecasts following the implementation of President Donald Trump's extensive trade tariffs this week. This move stirs fresh concerns about potential credit score downgrades worldwide.

S&P, a pivotal entity in assessing the creditworthiness of thousands of companies and over 130 nations, has stated that the magnitude of the tariffs has surpassed expectations. It plans to release its adjusted forecasts next week, with initial predictions suggesting an increase in U.S. inflation to nearly 4% by year-end, up from the previously forecasted 3%.

The overall impact on U.S. GDP will largely hinge on retaliation from trading partners and the utilization of tariff revenues, possibly towards tax cuts. Even with modest retaliation, GDP growth could reduce by three-tenths to four-tenths of a percentage point compared to recent projections, S&P indicated.

(With inputs from agencies.)