China and the U.S. appear ready to hit pause on tit-for-tat tariffs to pursue a potential trade agreement, inspiring Wall Street veteran investor Ed Yardeni to dial back recession odds.
What Happened: Signs emerge that Washington, D.C. and Beijing may finally be willing to ease trade tensions that have rocked global markets and dented economic confidence.
In a note shared Monday, Yardeni said he’s reducing his subjective probability of a U.S. recession to 35%. That’s down from 45% at the end of March.
Yardeni’s new estimate matches the level seen in early March and reflects growing optimism that ongoing tariff disputes will de-escalate.
“We are now lowering our odds of a recession back down to 35% because we believe that China and the US both may be ready to suspend their tariffs on each other while they negotiate a trade deal,” the Yardeni Research President said.
“In other words, both sides may be starting to blink.”
Markets have been rebounding sharply amid latest trade developments. Yardeni sees this as a reflection of confidence in a resolution and perhaps an early end to what he dubbed Trump’s “Reign of Tariffs.”
Yet, he isn’t blind to …