Economist: Trump tariffs could send the S&P 500 to 4,450 and the economy into recession

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Investors should brace for a leaner stock market and economy as Trump tariffs and retaliations from trading partners like Canada, Europe, and China take hold.

Those are the gloomy calls from BCA Research chief strategist Peter Berezin.

BCA Research is an independent research firm that has been in business since 1942 and is among the largest independent macroeconomic forecasters to institutions. And Berezin has been an economist for more than 30 years, with stints at the International Monetary Fund (IMF), Goldman Sachs, and now BCA Research.

Berezin gained attention this year for being the lone bear on Wall Street coming into 2025. Further, he correctly called that in 2022 there would be no US recession — despite most on the Street bracing for one.

In a new episode of Yahoo Finance’s Opening Bid podcast (see video above), Berezin doubled down on his recent call that there is a 75% chance of a US recession this year. In a new wrinkle shared with me, Berezin believes the US may already be in a mild recession.

He forecasts slight negative economic growth for the year as consumers pull back amid a more inflationary environment, thanks to a global trade war.

Read more: What Trump’s tariffs mean for the economy and your wallet

Assuming his economic call holds true, Berezin thinks the S&P 500 (^GSPC) is destined for 4,450 — down about 21% from current levels. The best places for investors to hide out this year may continue to be gold and consumer staples and soon, bonds.

“I don’t think the effect of tariffs is fully priced into markets,” Berezin said. “If you look at what’s happened to stocks this year, they have gone down, but they’ve gone down primarily because of the Magnificent 7 stocks. If you look at the other 493 companies, they’re basically flat for the year. That’s not what you would expect from a market that has priced in a recession.”

Others on the Street have become more cautious about stocks and the economy as Trump tariffs come into focus.

Goldman Sachs chief economist Jan Hatzius said Monday he now sees US gross domestic product (GDP) growth averaging 1.5% in 2025. That’s down from previous expectations for growth to average 1.9%.

In addition, he sees a 35% chance of a US recession in the next 12 months, compared with 20% previously.

Meanwhile, Hatzius’s colleague David Kostin slashed his 2025 S&P 500 target to 5,700 from 6,200. He cited a higher recession risk and tariff-related uncertainty.

Kostin joins the likes of SocGen and Yardeni Research in lowering S&P 500 targets within the last few weeks.

Berezin explained, “I don’t expect a very deep recession because the imbalances in the economy are not as severe as they were in say, 2008. Nevertheless, I think we’ll probably get a fairly nasty recession, especially as financial markets are concerned. You think about the 2001 recession, that was a very mild recession. We didn’t even have two consecutive quarters of negative growth, and yet stocks still fell 49% peak to trough because they were so expensive going into that recession.”

The full Opening Bid episode with Berezin will air at 8:30 a.m. ET on April 7.

Three times each week, I field insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.

Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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