• Financial analysts have increased recession probabilities to between 20-40%, citing Trump's tariffs and economic policies.
  • The S&P 500 has fallen to its lowest level since September, erasing post-election gains.
  • Trump has begun warning Americans to expect economic turbulence before his policies can deliver prosperity.

Two months into Donald Trump's presidency, the economic optimism that followed his election has begun to fade as analysts increasingly warn of recession risks and markets show signs of distress.

Major financial institutions have significantly raised their recession forecasts in recent weeks.

JP Morgan now puts the odds at 40%, up from 30% at the year's start, while Moody's Analytics increased its probability from 15% to 35%. Goldman Sachs likewise adjusted its forecast from 15% to 20%, citing policy changes as "the key risk" to economic stability.

These warnings coincide with a sharp decline in the S&P 500, which has fallen to its lowest level since September, erasing gains made following Trump's November election victory.

Analysts point to Trump's recently implemented tariffs on imports from America's three largest trading partners as a primary concern. These new duties are expected to raise costs for businesses and consumers while potentially curbing economic growth.

"What the president and his cabinet are signaling is a bigger deal. It's a restructuring of the American economy," explained Brian Gardner, chief of Washington policy strategy at investment bank Stifel.

The economic uncertainty comes as Trump himself has begun preparing Americans for potential hardship.

Despite campaign promises of prosperity, he recently warned the public to expect a "little disturbance" before his policies can "bring back wealth" to the country.

This rhetoric marks a departure from Trump's first term when he frequently cited stock market performance as evidence of his success.

The US economy was already experiencing a planned slowdown engineered by the Federal Reserve's higher interest rates.

Recent data suggests this cooling may be accelerating, with February retail sales declining and consumer confidence falling after a post-election boost.

Federal Reserve Chair Jerome Powell attempted to calm concerns last week, stating that "despite elevated levels of uncertainty, the US economy continues to be in a good place."

Edited by Annette George