With around-the-clock tariff headlines pounding stocks, recession calls or predictions for a sharp economic slowdown are coming into the light. 

The most dire one dropped today.

BCA Research's veteran strategist Peter Berezin said he sees a 75% chance of a recession within the next three months.

"Conventional estimates understate the likely impact on economic activity from the trade war and DOGE cuts. This implies that growth will slow more than expected," Berezin said.

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Berezin outlined three key underpinnings to his prediction.

First, higher tariffs hammer real incomes of workers, which slows demand. Two, the shoddy way tariffs policy is being handled is raising public and business uncertainty. And lastly, tariffs are likely to push up inflation and make the Federal Reserve less willing to cut interest rates.

Added Berezin, "Contrary to popular perception, the US is at greater risk of a recession than it was in early 2022. Back then, when we were still optimistic on growth, the US economy had plenty of insulation around it: Job openings were plentiful; households held more than $2 trillion in excess savings; and many homeowners had refinanced their mortgages at very low rates."

JPMorgan economist Nora Szentivanyi slipped in a warning of her own this week.

"Our baseline has treated the threat of USMCA tariffs as largely transactional based on our assessment that the economic damage from a meaningful sustained tariff hike would be too large — enough to throw the Mexican and Canadian economies into recession and also seriously damage US growth. While the scale and timing of the tariffs remains unclear, we are increasingly concerned about the uncertainty shock to business investment via the sentiment channel and have started to recalibrate our forecasts in response," Szentivanyi pointed out in a new client note.

A recent influx of data underscores the yawning concern on economic growth by market watchers.

The Conference Board’s Consumer Confidence Index dropped for the third straight month in February. It notched the largest monthly decline since August 2021, as expectations for inflation — in part fueled by tariff fears — climbed.

"References to inflation and prices in general continue to rank high in write-in [survey] responses, but the focus shifted towards other topics. There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019," the board's senior economist Stephanie Guichard said in the release. 

"Most notably, comments on the current Administration and its policies dominated the responses.”

The latest Dallas Fed survey for February saw its production index — a barometer of state manufacturing conditions — plunge 21 points from January. The new orders index fell 11 points and the capacity utilization index declined 14 points.

Perceptions of broader business conditions worsened in February as well. 

Meanwhile, the layoffs of federal workers at the hands of Elon Musk's DOGE are becoming evident in the data. Federal employee initial jobless claims rose by about 1,000 in the most recently recorded week. New Challenger, Gray & Christmas data reported 62,000 announced government job cuts in February.

And it's been a bad start to earnings season for America's biggest retailers.

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Profit warnings have mounted as cautious consumers pulled back on spending after the holidays. And execs have issued below-consensus 2025 outlooks as they plan for a barrage of costly Trump tariffs.

Walmart's (WMT) outlook was poorly received by investors in mid-February. Rival Target (TGT) didn't have much good to say either this week when it reported fourth quarter results and guidance.

Abercrombie & Fitch's (ANF) outlook was shy of estimates; ditto Best Buy (BBY) and Macy's (M).

All these stocks were hammered in response as investors recalibrated their profit expectations.

"We're all dealing with tariffs. We're monitoring the developments of tariffs on an hourly basis," Gap (GAP) CEO Richard Dickson told me on Yahoo Finance. 

The markets have moved to begin pricing in an economic slowdown.

The S&P 500 Index (^SPX) has fallen back to levels before the US election in November. The Nasdaq Composite (^IXIC) and Magnificent 7 are both now in technical correction territory, or off 10% or more from their highs. Momentum stock darlings Nvidia (NVDA) and Tesla (TSLA) are down 26% and 45%, respectively, from their all-time highs.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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