Fitch Ratings warned on Thursday that United States tariffs significantly increase the risk of the country entering a recession, as the newly imposed levies reached a level "last seen in 1909."
Fitch insisted that US economic growth is likely to be slower than the 1.7% projected in March. "Tariff hikes will result in higher consumer prices and lower corporate profits in the US. Higher prices will squeeze real wages, weighing on consumer spending, while lower profits and policy uncertainty will act as a drag on business investment," it was noted in the report. Growth outlook for the rest of the world also deteriorated, particularly for the Asian region, the credit rating agency said.
Furthermore, Fitch claimed that the Federal Reserve would probably become "more cautious" about further interest rate cuts due to "higher-than-anticipated" tariffs.
