U.S., Canada Face Recession Amid Trade War Concerns

Desjardins economists have forecast a recession for both Canada and the U.S. this year, driven by detrimental trade policies, slowing population growth, and rising mortgage renewals. The report highlights that retaliatory tariffs could exacerbate economic downturns and inflation, leading to anticipated rate cuts by the Federal Reserve and Bank of Canada. As the U.S. economy faces increasing downside risks, Desjardins predicts a significant depreciation of the U.S. dollar against other currencies, while global equities are expected to outperform domestic markets. The analysis suggests that persistent inflation concerns may complicate aggressive rate reduction strategies, challenging typical central banking responses during recessions.