1451 ET - The broad-based tariffs President Trump unveiled, if held in place, materially increase the likelihood of a recession in the U.S., and global economy, according to Morgan Stanley in a research note. As it stands, tariffs threaten to slow economic growth and catalyze inflation, the analysts say. An economic downturn could emerge from an uncertainty-induced slowdown in spending, which could result in business delaying spending and hiring plans--or outright cuts to spending and employment, they add. "A second channel is via adverse wealth effects on high-income consumers," the analysts say, noting that while these consumers are better able to withstand tariffs, they are more sensitive to changes in net wealth. (connor.hart@wsj.com)

(END) Dow Jones Newswires

April 04, 2025 14:51 ET (18:51 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.