Company: ADAMM
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001273685-25-000072
Chunk: 202

Company: ADAMAS TRUST, INC.
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 2
Chunk 202
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 fears of an economic recession – a significant decline in economic activity that is spread across the economy and that lasts more than a few months, as defined by the National Bureau of Economic Research – in the U.S. resurfaced in the start of 2025 due in part to uncertainty involving tariff and trade policies. Specifically, on April 2, 2025, the current U.S. administration rolled out “Liberation Day” tariffs, which became effective in early April 2025, including a minimum baseline tariff of 10% on all trading partners and, furthermore, targeted punitive levies on certain countries with the largest U.S. trade deficits. Taking into account these tariffs, an April 2025 survey of economists by the Wall Street Journal indicated that the respondents believed that the probability of a recession in the next twelve months is at 45%, the highest probability indicated by the Wall Street Journal’s survey since late 2023. However, a July 2025 survey of economists by the Wall Street Journal lowered the probability of a recession in the next 12 months to 33%. Originally, the economists surveyed by the Wall Street Journal attributed the increased likelihood of a recession in the next twelve months to significant reductions in their expectations for GDP growth, driven by U.S. tariff and trade policy and inflation concerns, among other factors. As of July 2025, these economists surveyed by the Wall Street Journal cited improved second-quarter GDP forecasts for the decrease in likelihood of a recession. Even so, trade uncertainty persists with the potential for reciprocal tariffs to become effective on August 1, 2025. As of July 31, 2025, certain U.S. trading partners have reached an agreement with the U.S. with respect to tariffs. However, a number of U.S. trading partners have not reached tariff agreements with the U.S., and it remains to be seen the extent to which tariffs will be imposed and enforced on those U.S. trading partners that do not reach an agreement. Tariffs are often considered to be inflationary, including with respect to construction costs, with such higher costs frequently borne by consumers. Higher prices resulting from tariffs may generally lead to a reduction in economic activity, particularly if such increase in prices is not offset by a reduction in interest rates. Moreover, uncertainty with respect to the global trading system has unnerved certain markets, including the bond market, and may be reflective of broader fears regarding the U.S. and global economic stability. An economic recession, stagnating economic growth or market disruption may put