Forecasters expect Trump's trade conflict to hit economic growth this year and next as tariffs push up prices and curb consumer spending.

The latest survey of economists by Bloomberg shows that the U.S. economy is expected to grow 1.4% in 2025 and 1.5% in 2026, down from 2% and 1.9% forecast in last month's survey.Currently, the median respondents believe that the probability of an economic recession in the next 12 months is 45%, higher than the 30% in March.

Trump has decided to impose at least 10% tariffs on most other countries, with many forecasters warning of a sharp slowdown, and some even predicting a recession this year. This is partly due to the sharp reduction in household demand expectations, which account for about two-thirds of the U.S. GDP.

"To achieve stronger growth, a quick resolution of trade conflicts and a renewed confidence in U.S. policymaking," said Brett Ryan, senior U.S. economist at Deutsche Bank AG.

While the Trump administration has imposed a 90-day (i.e., three-month) suspension on some of the more punitive tariffs announced earlier this month, Bloomberg Economic data shows that the U.S. is currently close to 23%, the highest level in more than a century. This has hit consumer and corporate confidence.

The International Monetary Fund (IMF) significantly lowered its forecast for global growth this week and warned that if U.S. tariffs continue, it will have a ripple effect around the world.

Economists are currently expecting imports to grow by 19.2% in the first quarter after an annualized adjustment, as businesses are rushing to ship goods into the United States before high tariffs take effect. They also lowered their growth forecast for 2027.

The U.S. Bureau of Economic Analysis (BEA) will release preliminary estimates of first-quarter GDP on April 30.

Economists expect the Fed's preferred measure of inflation—Personal Consumer Expenditure (PCE) Price Index—to peak at 3.2% by the end of 2025, up from 2.7% expected in the March survey.Core PCE inflation rate (excluding food and energy) is expected to reach 3.3%.

"Inflation is considered to rise, but not as bad as it was in 2022. Since the tariff hike, the Fed has been warning that unlike traditional economic shocks (which will reduce demand and prices), the threshold for lowering interest rates is higher," said Bill Adams and Waran Bhahirethan, economists at Comerica Bank.

The labor market is believed to have remained basically stable in the near future, and forecasters expect that on average, 72,000 new jobs will be added each month this year and next year, respectively.They expect the unemployment rate to rise to 4.6% by the end of 2025, up from the 4.3% forecast in March.

The survey was conducted from April 18 to 23, with a total of 82 economists participating.