Apollo’s Slok Predicts U.S. Will Face Recession in 2025 If High Tariffs Persist

U.S. will have a recession in 2025 if high tariffs stay, Apollo's Slok says

The Looming Recession: Insights from Apollo’s Chief Economist

As economic uncertainties loom over the U.S. landscape, Torsten Slok, the chief economist at Apollo Global Management, has made some bold predictions regarding the potential for a recession, particularly if current tariff levels remain unchanged. According to Slok, there’s a 90% likelihood of a two-quarter economic contraction in 2025 if the high tariffs introduced earlier this month persist. At Extreme Investor Network, we understand that such predictions can significantly influence investment strategies and consumer behavior.

The Tariff Impact: A Blunt Reality

Slok’s comments, delivered during a recent appearance on CNBC’s "Squawk on the Street," underline the magnified impact of tariffs, especially on small businesses. President Trump’s decision to increase tariffs on Chinese goods to 145% and the temporary 90-day reprieve on some tariffs has created a whirlwind of uncertainty. Slok’s analysis suggests that while larger corporations may weather the storm, small businesses are most vulnerable, lacking the cash reserves needed to absorb these heightened costs.

"Small businesses simply do not have the liquidity to deal with a 145% increase in tariffs," Slok stated, warning of potential bankruptcy waves across the retail sector. This reality resonates deeply within the fabric of the U.S. economy, given that small businesses account for approximately 80% of total employment.

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Here at Extreme Investor Network, we encourage investors to pay close attention to the shifting dynamics of the small business landscape. A downturn in retail will not only cause significant job losses but also dampen consumer sentiment, ultimately shaping broader market trends.

Monitoring Labor Market Indicators: Jobless Claims

One crucial indicator to watch is the weekly jobless claims report, which Slok emphasizes as an early indicator of job market weakness stemming from recessionary pressures. As small businesses begin to struggle under the weight of tariffs, we may see an uptick in unemployment claims, providing a clearer picture of economic health in real-time.

While many Wall Street analysts are cautiously optimistic, Slok points out that the unpredictability surrounding tariffs makes forecasting difficult. Fellow economist David Kelly from JPMorgan Asset Management has posited a 60% chance of recession under similar conditions, reflecting the growing consensus that economic stability is fragile.

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What Can Investors Do?

In these uncertain times, it’s essential to stay informed and agile. Here are a few strategies we suggest for investors looking to navigate the turbulent waters ahead:

  1. Diversify Portfolios: Investing across various sectors can help limit exposure to any one market segment, especially those heavily impacted by tariffs.

  2. Stay Informed: Regularly track economic indicators, including jobless claims, consumer spending, and tariffs, to stay ahead of market trends.

  3. Consider Alternatives: Explore investment opportunities in industries that could thrive despite economic downturns, such as renewable energy or technology sectors.

  4. Leverage Expert Insights: Engage with financial experts and attend events like our upcoming Pro LIVE event at the New York Stock Exchange, where you can network with industry leaders and gain firsthand insights into navigating these challenges.
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Join Us at Pro LIVE

We invite you to take your investment strategy to the next level by joining us at our exclusive Pro LIVE event on June 12 at the historic New York Stock Exchange. This unique gathering will feature interactive clinics led by industry experts, alongside opportunities to discuss prevailing market conditions, including the effects of tariffs and recession forecasts.

At Extreme Investor Network, we are committed to empowering our community with the knowledge and tools necessary to thrive in challenging economic times. Don’t miss this chance to connect with fellow investors and enhance your approach to an ever-evolving market landscape.

Stay tuned for more insights and be proactive in your investment strategy. Together, we can navigate the challenges ahead!