Deutsche Bank has raised concerns that President Donald Trump’s recent tariff measures, dubbed 'Liberation Day,' could escalate recession risks and potentially prompt rate cuts sooner rather than later, should these tariffs remain in place for an extended period.

Regarding the idea of rate cuts, the investment institution stated: “For the Fed this makes them more likely to cut even if the direction of travel is highly stagflationary. The bias will now be towards up to four cuts this year if this tariff policy holds.” 

Moreover, from the idea of a recession, Deutsche Bank added: “Recession risks will likely rise materially if these tariffs are sustained.” 

The investment bank highlighted that President Trump’s latest tariff measures, combined with mounting concerns about consumer confidence and the outlook from corporate executives, create a significantly more difficult environment for forecasting on Wall Street. As uncertainty continues to cloud the markets, navigating this landscape has become increasingly complex, further compounding the challenges faced by analysts and investors alike. 

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