Recession Canceled? Update from Barclays Explained in 1 Minute

The British bank Barclays has upgraded its U.S. economic forecast, scrapping earlier recession fears after a temporary U.S.-China trade deal eased tensions. Here’s what you need to know:

Key Updates

• U.S. Growth: Barclays now predicts 0.5% growth in 2025 (up from -0.3%) and 1.6% in 2026.
• Eurozone Outlook: Expected to avoid contraction this year, but a mild recession is still likely in late 2025.
• Trade Truce: The U.S. and China agreed to slash tariffs for 90 days starting May 14:
  • U.S. tariffs on China drop from 145% to 30%.
  • China’s tariffs on U.S. goods fall from 125% to 10%.
  • Existing tariffs on electric vehicles and metals remain.

Lowering tariffs temporarily helps both sides avoid economic damage. 

Big banks like JPMorgan and Goldman Sachs also softened recession predictions, citing reduced trade tensions. JPMorgan’s CEO now sees a 50% chance of recession, down from 60%.