President Trump on Wednesday laid out his long-awaited plans to slap reciprocal tariffs on countries around the world — prompting warnings from Wall Street economists that the risk of a US recession just went up.

In a note published Wednesday, Oxford Economics economist Ryan Sweet said the economy has become "dangerously vulnerable" to a recession over the next 12 months, with the average US tariff rate set to rise to levels not seen in 100 years.

Sweet laid out three key factors in explaining his call: a greater boost to inflation, which would dampen real disposable income; tightening financial conditions, which could lead to further equity declines; and elevated trade policy, which will "suffocate" business investments and weigh on hiring.

Oxford revised its 2025 GDP growth outlook to 1.4%, down from its prior 2% forecast. Core inflation is expected to rise to 3.9% this year compared to the prior 3.1%, according to the firm.

In other words, the risk of stagflation is showing up more firmly in Wall Street's projections.

Stagflation — a bleak economic scenario in which growth stalls, inflation persists, and unemployment rises — has become the latest buzzword in financial markets following a string of disappointing data releases, the Trump administration's shifting trade narrative, and other policy unknowns, including recent efforts to cut government jobs from Elon Musk's Department of Government Efficiency (DOGE).

Read More: What is stagflation, and how does it impact you?

Last week, data released by the Bureau of Economic Analysis showed consumers spent less than forecast in March while inflation rose more than anticipated — a sign that stagflation cracks are beginning to show up in hard economic data, or objective metrics. That coincided with weak survey and sentiment readings , often referred to as soft economic data, which highlighted increased pessimism on the outlook for inflation and the US labor market.

Notably, the Federal Reserve has maintained a base case that tariff-induced inflation will be "transitory" and, therefore, have a short-term impact on price growth. This was reflected in the central bank's latest projections , which forecast year-end PCE inflation rising to 2.7% before reaching its 2% target by 2027.

But economists have argued "transitory" inflation remains an unrealistic expectation and that the Fed has underestimated the extent to which tariffs are likely to push up inflation.

EY economist Greg Daco projected that the expected increased cost of imports would represent an annual income loss of $690. For lower-income families, the loss would surpass $1,000.

"Importantly, we stress that a significant adverse financial market reaction would exacerbate these shocks and push the US economy into a recession," Daco said.

Other Wall Street firms have echoed similar sentiments. Morningstar described tariffs as "a self-inflicted economic catastrophe," noting recession risks over the next year have climbed to at least one-third, while the global economic outlook will experience "an entirely new level of uncertainty."

JPMorgan economist Michael Feroli highlighted the expected hit to purchasing power, which could turn disposable income growth negative in the second half of the year and contract consumer spending: "This impact alone could take the economy perilously close to slipping into recession."

Bank of America, which categorized the stagflationary scenario as "much more likely now," said rising inflation and falling GDP could push the economy "to the precipice of recession."

"In this scenario, it would become even harder for the Fed to cut this year but ease substantially into next year," the team said, emphasizing those higher inflation risks.

But some say overarching growth fears will force the Fed to act more aggressively.

Neil Dutta, head of economic research at Renaissance Macro, argued negative growth effects will outweigh inflation concerns. He's predicting four interest rate cuts by year-end, roughly on par with current market expectations between three to four.

Alexandra Canal @allie_canal , LinkedIn,