Some friends say that not all of the sharp decline was caused by tariffs, but in fact, tariffs cannot be blamed entirely. However, tariffs are one of the reasons that triggered the expectation of a recession, because in the early stages of the decline, the GDP forecast for the first quarter of 2025 given by GDPNow in the United States was still positive. It was only when the risk market had already fallen by a large part that the expectation was negative. Now the United States has entered a trading recession, but ironically, employment in the country is still very strong, and the economy has not shown any signs of significant contraction. However, investors can give reasons to expect an economic recession. So what reasons make investors believe that the economy will fall into recession? The primary answer must be the management of monetary policy by the Federal Reserve. In other words, the Federal Reserve is not willing to cut interest rates quickly. While tariffs were expected by the end of 2024, most investors did not realize that they would come so unexpectedly, especially when inflation is still high. The increase in tariffs is equivalent to reducing the income of American households on the one hand, and actually lowering GDP on the other hand. Because of the rise of expected inflation, the market gave a dangerous signal for the Federal Reserve to cut interest rates, and this signal was expanded through the data of GDPNow. Then Trump himself said that the U.S. economy might enter a transition period, which increased the panic of investors. In Trump's opinion, we should first increase tariffs and then reduce taxes to stimulate the American economy, so it depends on when the turnips for tax reduction will be released. This tweet is sponsored by @ ApeXProtocolCN | Dex With Apex