Peter Berezin, Chief Global Strategist at BCA Research, has warned that the risk of a recession remains high, though there’s a chance the U.S. could still avert an economic downturn.
According to Berezin, the economy might avoid a collapse if President Donald Trump rolls back tariffs and adopts a less protectionist approach, he said in a June 6 post on X.
He also pointed out that the economy could sidestep a contraction if bond markets remain unconcerned about growing government deficits. This comes amid controversy over Trump’s proposed “One Big Beautiful Bill,” which is feared to worsen the federal deficit and national debt.
“If Trump further dials back the tariffs and the bond market snoozes at the prospect of ever-bigger deficits, we could get lucky this time and avoid a downturn. Possibly, but I am not counting on it,” he said.
Employment data impact on recession odds
Notably, Berezin’s comments follow the release of strong May employment data. The Bureau of Labor Statistics reported 139,000 new jobs, exceeding the 120,000 forecast, while the unemployment rate held steady at 4.2%, near historic lows.
To support his view, Berezin referenced BCA Research’s data tracking unemployment and a key consumer confidence metric, which have historically declined ahead of recessions. He noted that the current trends resemble past pre-recession patterns.
It’s worth noting that Berezin has been sounding the alarm since Trump’s controversial tariffs were first introduced, estimating a 75% chance of a downturn this year. Even with a temporary pause in tariff activity, he maintains that the risk hasn’t fully disappeared.
“Recessions often begin when an economy becomes vulnerable to a downturn and is then hit by a shock. Once that happens, feedback loops typically emerge that reinforce the downward pressure on growth. <…> Today, the U.S. finds itself on the verge of such a cascade of bad economic news,” Berezin explained.
Beyond tariffs, Berezin also cited rising delinquencies in credit cards, auto loans, and commercial real estate as contributing factors.
However, recession odds have decreased in recent weeks following progress in U.S.-China trade negotiations.
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