Recession Risk and Tariffs: KPMG Chief Economist Diane Swonk's Analysis

Tariffs and Economic Impact

• 📈 The effective tariff rate is currently at a record high of about 30%, exceeding previous records from 1899.
• ⚠️ The recent pause on some tariffs is not an end to trade wars, and higher rates remain in place, particularly on China.
• 🛍️ Tariffs are increasingly impacting consumer goods, which will likely lead to rising inflation in the coming months.

Inflation vs. Growth Concerns

• ⚖️ The economy faces a difficult situation where both inflation and growth are expected to be problems simultaneously.
• 🏦 This scenario places the Federal Reserve in a challenging position, as they must address inflation without further damaging economic growth.
• 📉 KPMG economists believe the U.S. is