Discussion about the possibility of a recession has been prevalent for some time, but it has intensified in recent weeks, particularly with a new government administration. Economists are trying to forecast how the markets might react to new policies, like tariffs, and an uncertain financial landscape.

Goldman Sachs, a global investment bank, has raised its projection of a U.S. recession twice in late March and early April from 20% to 35% and then up to 45%. Given these forecasts and recollections from the Great Recession, concerns about another economic downturn are escalating.

The U.S. is currently not in a recession, defined as a period of economic decline typically characterized by two consecutive quarters of contraction. While the Federal Reserve Bank of Atlanta projects a growth rate of -2.8% for the first quarter of 2025, the Bureau of Economic Analysis reported a 2.4% expansion in the final quarter of 2024. The situation will likely become clearer during the second quarter of 2025, with the potential for a recession by summer if negative growth persists.

Many experts are indicating an elevated likelihood of an impending U.S. recession. Goldman Sachs projects a 45% chance, JPMorgan has increased its estimate to 60%, and the CNBC Fed Survey shows the risk rose to 36% in March. Warning signs like decreased consumer sentiment, policy uncertainties, and inflation are key factors that may indicate an approaching recession.

Preparing for a potential recession is wise regardless of current economic conditions. To bolster financial stability, it's advised to prioritize building an emergency fund, evaluating spending habits, reducing high-interest debt, planning for significant expenses, and maintaining a level-headed approach to financial decisions amidst uncertainties.