Is A Recession Inevitable Now? | David Hay

"Everything just changed" due to the Trump tariff tsunami

Wall Street feels like the world just got turned on its head.

The once-bulletproof market rally shifted into reverse, with stocks falling for weeks to oversold levels in the short-term.

And just when traders thought a bounce was due, President Trump's Liberation Day tariffs announcements sent the markets plunging by percentages not seen since the worst of the COVID crisis.

What is going on and what's most likely to happen from here?

Is a recession inevitable at this point?

To discuss, we're fortunate to be joined today by David Hay, the up-until-recently Chief Investment Officer & Principal at Evergreen Gavekal.

He is just days into his retirement from that role, which means he's free to be a lot more detailed and specific with us in his answers now that he’s not subject to compliance constraints.

To benefit from of David’s wisdom, click here or on the video below:

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Adam’s Notes: David Hay (recorded 4.8.25)

• Market Chaos Post-Liberation Day: David Hay describes the recent market plunge as a “crashette,” triggered by President Trump’s Liberation Day tariffs, which blindsided a complacent Wall Street, reversing a two-year rally into a 15% S&P drop in mere trading hours. He highlights unprecedented volatility—akin to 2008, 2020, and 1929—driven by tariff uncertainty, labeling it chaos after a period of ignored risks, with a short-term rally likely but overshadowed by broader economic threats.

• Recession Odds Soaring: David sees an 80-90% recession probability, up from Goldman’s 45%, fueled by tariffs disrupting supply chains, consumer spending (e.g., a client canceling a Porsche order), and a slowing economy pre-tariff shock. Unlike COVID’s brief dip, he anticipates a grinding, multi-quarter downturn, reminiscent of pre-2010 cycles, exacerbated by fading fiscal stimulus and a leveraged consumer base.

• Grinding Bear Market Dynamics: With stocks at record household exposure (29% of financial assets), David warns of