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Everyone’s tired of the “T” word. For today, we will simply refer to them as ‘global cover charges,’ OK? So, if you’ve felt a strange chill in the economic air lately, it’s not just your HVAC acting up—it’s the growing scent of a slowdown, with Wall Street now betting on the “R” word.

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Story: Speaking of bad words, we’re now flirting with the "R" word again. Recession. Goldman Sachs, JPMorgan, and the Fed are all nervously watching various economic signals that all seem to point to the “R” word. Why? Mostly as a result of the fresh batch of tar…errr…I mean global cover charges that have sent the international community into a tizzy. Here's the data dump:

• Goldman Sachs bumped recession odds to 35%, cut GDP growth forecasts to 1.0%, and expects core PCE inflation to hit 3.5% by the end of 2025.

• JPMorgan is less subtle—it predicts a 60% chance of a two-quarter recession in the second half of 2025.

• The Fed’s preferred recession indicator, the difference between the 2- and 10-year treasuries (aka the inverted yield curve), deteriorated as fast last week as it did in 2008.

• Unemployment is expected to rise to 5.3%. It’s currently at 4.2%.

• Retail spending? The NRF projects just 2.7%-3.7% growth, down from 2024’s 3.6%.

• The Atlanta Fed’s GDPNow model throws out numbers like -2.8% GDP growth for Q1 2025.

Oof.

So What? If you own properties, this is your early warning system. A slower economy means tighter wallets. Tenants might pay late (or not at all), buyers might dry up, and if inflation ticks higher, repair costs could increase while rent growth stalls. That said, all indications now point to lower interest rates. Let’s take the “W” on that and move on. And let’s not forget—global cover charges act like a short-term hidden tax on everything from appliances to construction materials.

What’s Next? Keep an eye on GDP numbers (📆 April 30) and unemployment data (📆 May 2) this summer closely. If they follow JPM’s recession script, start prepping your portfolio: lock in rates, boost reserves, and get proactive with tenants. Also, watch what the Fed says in its June and September meetings—rate cuts will likely follow, but the path there could be rocky.

Sources: NPR, Reuters, Reuters, Retail Dive

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