Rising Recession Risks and Market Volatility—What Investors Need to Know

Introduction
Just weeks ago, markets were at record highs. Now, recession fears are spreading quickly.

Wall Street’s top banks—JPMorgan Chase, Goldman Sachs, and Moody’s Analytics—have all raised their recession forecasts, pointing to slowing consumer spending, surging corporate bankruptcies, and economic policy uncertainty.

Meanwhile, the stock market is plunging, the Atlanta Fed slashed its GDP forecast to -2.8%, and inflation remains a risk despite cooling slightly.

With uncertainty rising, investors are looking for stability—and this month, we explore why First Trust Deeds stand out as a secure, income-driven alternative to volatile markets.

Recession Fears Surge: What the Experts Are Saying
Over the past month, Wall Street’s recession warnings have intensified as economic conditions have deteriorated.

• JPMorgan Chase now places recession odds at 40%, up from 30%, citing “extreme U.S. policies” and deteriorating business confidence.
• Goldman Sachs increased its 12-month recession probability from 15% to 20%, warning that trade policy instability and weaker global growth could tip the economy into contraction.
• Moody’s Analytics raised its forecast to 35%, calling the risks "uncomfortably high – and rising."

These warnings come as leading economic indicators point to slowing growth and increased financial stress:

• The Atlanta Fed’s GDPNow model shocked markets by slashing its Q1 2025 forecast to -2.8%, a drastic drop from +4.0% just one month ago.
• Corporate bankruptcies surged to their highest level since 2010, with 129 major filings in the first two months of 2025—a 40% increase year-over-year (S&P Global).

At the same time, other economic indicators are flashing red:

• The Conference Board’s consumer confidence index dropped seven points to 98.3, with expectations plunging below 80—a historic recession warning signal.
• Retail sales posted their largest decline in nearly two years, as households pulled back on discretionary spending.
• Major corporations are bracing for weaker demand—Delta Air Lines cut its profit outlook, citing weaker travel demand, while Walmart warned of lower consumer spending trends.

Economists warn that a negative feedback loop—where falling confidence leads to weaker spending, which triggers layoffs and further economic weakness—could accelerate a downturn.

Stock Market Plunge: A Warning Sign?
The financial markets have been hit hard as recession fears rise:

• Nasdaq has plunged 9% in just 10 days, led by losses in AI and tech stocks.
• The S&P 500 fell 3% on March 10, extending its slide from record highs in February.
• The Magnificent 7 stocks have suffered major losses:
Tesla: -13% in one day over tariff concerns.
Nvidia, Apple, Alphabet: -5%+ in a single session due to profit-taking and AI stock jitters.

Ed Yardeni, president of Yardeni Research, summed it up:
"The stock market is losing confidence in Trump 2.0 policies. Everything is at risk now, mostly because of the administration’s rush to establish so many objectives in a very short period of time—with unintended consequences."

Meanwhile, CNN’s Fear & Greed Index flipped to “extreme fear”, while the VIX volatility index surged to 23.4%, its highest level since December.

Inflation Update: CPI Report Signals Moderation, But Risks Remain
The Consumer Price Index (CPI) report for February 2025 showed moderating inflation, but trade risks could change that.

• CPI rose 0.2% month-over-month, down from 0.5% in January.
• Year-over-year inflation stands at 2.8%, easing slightly from 3.0% in January.
• Core inflation, excluding food and energy, rose 0.2%, bringing the 12-month core CPI to 3.1%.

In detail, shelter costs rose by 0.3%, marking the smallest increase since 2021, while airline fares dropped 4.0% due to weaker travel demand; gasoline prices fell 1.0%, though higher electricity costs offset some of the relief, and food prices increased 0.2%, driven by rising restaurant costs outpacing grocery prices.

While inflation is cooling for now, tariffs could create new price pressures, keeping the Fed stuck on hold rather than cutting rates anytime soon.

First Trust Deeds: A Solid Pitch?
The growing likelihood of a recession, combined with market volatility, makes speculative investments riskier. Technology stocks, once seen as a growth engine, are now facing uncertainty as businesses and consumers tighten their budgets.

For investors seeking stability and predictable returns, First Trust Deed lending remains a compelling alternative.

Why First Trust Deeds Make Sense in Uncertain Times:
• Asset-backed security—Real estate collateral beats stock speculation when markets tank. If equities drop, First Trust Deeds remain stable.
• Steady income—yields around 10.5%+ outpace high-yield treasuries of around 4.5% while providing cash flow stability.
• Inflation hedge—Rental demand remains strong, ensuring reliable cash flow, unlike speculative tech stocks.
• Bubble immunity—Trust Deeds sidestep overhyped AI and tech sectors, where Price to Earnings ratios remain frothy, e.g., the Nasdaq 100 trades at about 30x earnings.

But Consider These Factors:
• Housing market risk: While not likely to mirror the 2008 crash, real estate values could dip if the economy slows. Location matters—Indiana’s market is different from California’s.
• Liquidity trade-off: First Trust Deeds lock capital longer than stocks or bonds.

Final Take: What Investors Need to Know
Recession odds are rising , and market volatility is accelerating. Speculative bets, especially in tech, are looking riskier, as the Magnificent 7’s declines show how quickly growth narratives can collapse.

Why First Trust Deeds Are a Defensive Play:
First Trust Deeds offer stable, income-driven, and tangible investments that are less exposed to stock market swings and speculative assets, while providing competitive 10.5%+ returns, significantly higher than Treasuries.

The economy isn’t doomed yet—Morgan Stanley still predicts 1.5% growth—but risks are real. Tariffs, falling confidence, and market instability could tip things further.

First Trust Deeds shine as a hedge against uncertainty—they won’t match bull market returns, but in a downturn, they’re a financial lifeline.

Call 877-280-5771 to learn more.

With 20+ years of experience navigating market cycles, our team at Safeguard is here to help. If stability matters to you, let’s talk.