• Wall Street is raising the probability that the US economy will slip into a recession, with some economists seeing 50-50 odds. That’s as President Donald Trump shows no signs of backing down on his aggressive tariff plans, including reciprocal duties set to take effect in a few weeks.

The likelihood that the US economy will slip into a recession is rising on Wall Street, with some economists even seeing 50-50 odds.

JPMorgan chief economist Bruce Kasman told reporters in Singapore on Wednesday that he now sees a roughly 40% recession risk, up from about 30% at the start of the year.

But he added that recession odds would rise to 50% or above if President Donald Trump’s planned reciprocal tariffs, which are due to take effect April 2, meaningfully come in to force.

“If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,” Kasman said.

Meanwhile, former Treasury Secretary Larry Summers warned that the chances of a recession are about 50%, citing Trump’s tariffs, immigration crackdown, and mass federal layoffs, which are combining to cause sharp reductions in consumer and business spending plans.

When economic forecasts start being revised in a certain direction, there tends to be momentum, he told Bloomberg TV on Tuesday. And all the revisions are going toward less growth.

“I think we’ve got a real uncertainty problem,” Summers added. “I think it’s going to be hard to fix that. And we’re looking at a slowdown relative to what was forecast almost for sure and serious near-50% prospect of recession.”

Moody’s Analytics chief economist Mark Zandi raised his recession odds to 35% from 15% at the start of the, citing tariffs.

But if Trump follows through with his tariff plans and stays there for more than a few months, that would be enough to push the economy into recession, he told Bloomberg TV on Wednesday.

For now, he has hope that negotiations will lead to tariffs getting reeled back in, which is keeping his forecast below 50%.

“But I don’t say that with any confidence with each passing day,” Zandi said. “And of course, the uncertainty around all of this is doing damage.”

In fact, surveys of consumers and businesses show that they are turning increasingly gloomy about the economy amid tariff uncertainty and mass federal layoffs. Even executives in deep-red states that voted for Trump say seeing business conditions are collapsing.

Elsewhere on Wall Street, recession probabilities aren’t as high, but they are rising sharply. Market gurus Ed Yardeni and Eric Wallerstein said earlier this month that they see odds of a bear market and a tariff-induced recession at 35%, up from 20%.

And Allianz chief economic advisor Mohamed El-Erian lifted his recession probability to 25%-30% from 10% at the beginning of the year.

Treasury Secretary Scott Bessent was asked on NBC’s Meet the Press on Sunday if he could guarantee there won’t be a recession, and he replied that there are no guarantees, adding that his earlier comment of an economic adjustment doesn’t mean there has to be a recession.

“But I can tell you that if we kept on this track, what I could guarantee is we would have had a financial crisis,” he said. “I’ve studied it. I’ve taught it. And if we had kept up at these spending levels, that everything was unsustainable. So we are resetting and we are putting things on a sustainable path.”

For his part, Trump last weekend refused to rule out a recession, causing stocks to dive, then said days later that he doesn’t see one coming. But Trump isn’t budging on his trade policies, saying Thursday that “I’m not going to bend at all.”

And when asked about the sharp dive in approval in a recent CNN poll on how Americans view Trump’s handling of the economy, the White House defended his economic plans and pointed to his record during his first term.

“Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs,” spokesman Kush Desai said in a statement. “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term.”

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Baidu Inc. released a new artificial intelligence model that articulates its reasoning, in an apparent bid to regain momentum against up-and-coming rivals like DeepSeek.

The Ernie X1 model by China’s internet search leader works similarly to DeepSeek R1 — which shocked Silicon Valley by offering comparable performance to the world’s best chatbots at a fraction of their development cost. Baidu’s reasoning model excels in areas like daily dialogs, complex calculations and logical deduction, it said in a statement Sunday.

Baidu also upgraded its flagship foundation model to Ernie 4.5. It immediately made all tiers of its service  — including the X1 model — free for its chatbot users, several weeks than earlier previously planned. 

The Beijing-based company was the first in China’s trillion-dollar tech sector to launch a chatbot modeled after OpenAI’s ChatGPT, but rival chatbots from ByteDance Ltd. and Moonshot AI soon took over in popularity. Open-sourced models like Alibaba’s Qwen and then DeepSeek gained greater recognition within the global developer community.

Ernie 4.5 outperforms OpenAI’s latest GPT 4.5 in text generation, Baidu said, citing several industry benchmarks.

Baidu has declared that it will make Ernie AI models open-source from June 30, representing a major strategic shift after the rise of DeepSeek. It also integrated the R1 model into its search engine — its bread-and-butter business.

The generative AI boom showed up in Baidu’s December-quarter results via a 26% jump in cloud revenue. That rise, driven by services provided to developers chasing computing power, was overshadowed by weak advertising sales amid China’s economic malaise.

Baidu concluded last month a drawn-out deal to acquire the YY Live streaming platform Joyy Inc. The $2.1 billion takeover released some $1.6 billion that Baidu previously deposited into escrow accounts, which it plans to invest into AI and cloud infrastructure.

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China will take steps to revive consumption by boosting people’s incomes, the official Xinhua News Agency reported on Sunday, citing a statement from the State Council.

Other measures include stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate, as the government tries to ease the deflationary pressures afflicting the economy.

Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage, Xinhua reported. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption. 

Read More: Why China Is Struggling to Escape Cycle of Deflation: QuickTake

Invigorating consumption has been a challenge for the government since the end of the pandemic. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year.

At annual parliamentary meetings this month, the country’s leadership made boosting consumption their top priority for the first time since President Xi Jinping came to power over a decade ago.

Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to hold a press conference Monday on measures to boost consumption.

Other highlights of the plan:

• Enlarge variety of bond-related products suitable for individual investors
• Adopt multiple measures to promote increase in farm incomes
• Raise financial help for some students
• Appropriately increase the basic pension for retirees
• Ensure timely and full distribution of unemployment benefits
• Support tourist attractions in expanding services and the reasonable extension of business hours
• Support opening of duty-free shops in cities where conditions permit
• Boost support for trade-in programs
• Lower the interest rate on housing provident fund loans at an appropriate time
• Scale back restrictions on consumption in an orderly manner
• Accelerate the development of new technologies and products such as smart wearables and autonomous driving

This story was originally featured on Fortune.com