Tariffs have raised the probability of a U.S. recession to around 35%: Pimco

The chances that the U.S. will experience a recession in 2025 have increased because of the tariffs it has implemented, Alec Kersman, managing director and head of Asia-Pacific at Pimco, said at CNBC's CONVERGE LIVE event in Singapore on Wednesday.

There is a "maybe 35% probability" that the U.S. will enter a recession this year, Kersman told CNBC's Martin Soong. That's up from the approximately 15% chance that Pimco estimated in December 2024 as the repercussions of U.S. President Donald Trump's tariffs take effect.

Nevertheless, Kersman pointed out that the firm's base case scenario is that the U.S. economy will grow by 1% to 1.5%, which is still an expansion, despite being "quite a significant decrease" from earlier expectations.

In fact, according to Kamal Bhatia, president and CEO of Principal Asset Management, a boost in domestic consumption because of such trade policies could help the U.S. economy grow more than anticipated.

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