Hua Er Jie Jian Wen·2025-05-14 00:58Core Viewpoint - Wall Street analysts have dramatically reversed their economic and stock market predictions within a month due to a sudden shift in Trump's tariff policies, leading to a collective acknowledgment of previous misjudgments [1][3]. Group 1: Economic Predictions - JPMorgan's chief economist Michael Feroli has abandoned his previous recession forecast, raising the GDP growth expectation for the year from 0.2% to 0.6% and lowering the recession risk assessment to "well below 50%" [1]. - Goldman Sachs' chief economist Jan Hatzius also retracted a recession prediction shortly after its release, adjusting growth expectations upward following Trump's announcement of a 90-day tariff suspension [3]. Group 2: Stock Market Predictions - Goldman Sachs' chief equity strategist David Kostin has revised his S&P 500 return forecasts upward, now predicting a 3-month return of +1% and a 12-month return of +11%, with index levels adjusted to 5900 and 6500 points respectively [5]. - Ed Yardeni has increased his S&P 500 year-end target from 6000 to 6500 points, attributing the change to market pressures on Trump to make concessions [7]. Group 3: Market Sentiment - Despite the chaotic predictions from strategists, the stock market has rebounded, with the S&P 500 erasing all losses for the year, aided by favorable CPI inflation data [10]. - Hedge funds are reportedly still net sellers, with leverage near historical lows, indicating a cautious sentiment among institutional investors despite the market's strong performance [10]. Group 4: Challenges in Forecasting - The frequent changes in predictions highlight the difficulty of forecasting in an environment heavily influenced by Trump's unpredictable policy shifts, as noted by JonesTrading's chief market strategist Michael O'Rourke [9].