Four Days Until China's 34% Tariffs Take Effect April 10; No US-China Talks Signal; Goldman Forecasts PCE 3.1% by Year-End

With China's 34% retaliatory tariff on all US goods set to take effect April 10, markets entered Sunday April 6 with no indication of US-China talks to defuse the escalation. The Trump-Xi Beijing summit (March 31–April 2) had focused on agriculture, rare earths, and fentanyl — not the new tariff round, which was triggered by Trump's April 2 metal and pharmaceutical tariff expansion. Goldman Sachs published an updated economic outlook on April 6 raising its year-end US core PCE inflation forecast to 3.1% — above both the Fed's 2% target and the January 2026 re-acceleration to 3.06% — and projecting US GDP growth at only 2.1% for full-year 2026. The bank's 12-month recession probability was revised to 35%, up from 30% earlier in the week. JPMorgan's Global Markets Strategy team reiterated its 60% US recession probability, characterizing the April shock as a 'three simultaneous contractionary shocks: oil supply disruption, tariff escalation, and weak payroll revision.' The Federal Reserve's next scheduled FOMC meeting (April 29–30) was now widely watched as a potential emergency response moment, with fed funds futures pricing a small probability of an unscheduled inter-meeting cut. However, the Fed was constrained by above-target inflation (core PCE 3.06%) from delivering the kind of stimulus that markets might expect.