(Reuters) - Barclays said on Thursday it favors fixed income investments over equities for the first time in "several quarters" and warned global economic growth was at risk due to U.S. President Donald Trump's escalating tariff policies.

Despite hurdles such as rising prices and poor fiscal outlooks in Western economies, the risk to fixed income assets was less than to equities, Barclays analysts said in a note.

"We have been overweight global equities over fixed income for several quarters, even as valuations became stretched. But now, the policy risks strike us as tilted largely to the downside," they wrote, without saying exactly how long they had preferred equities.

Trump has imposed a swathe of tariffs on many countries, including top U.S. trading partners, with his latest move being a 25% levy on auto imports. The breadth and speed of his policies have rattled global financial markets.

So far this year, the MSCI All-Country World index, a benchmark for global equities, has risen just 0.55%, given the potential for higher tariffs to lift inflation, dent corporate profits and slow the global economy.

The U.S. benchmark S&P 500 index has fared worse, sliding nearly 3%. However, benchmark 10-year Treasury bonds have rallied, with yields dropping to 4.3595% from a January 14 peak of 4.8090%.

Barclays said it expects a considerable slowdown in U.S. and global economic growth this year. While it reiterated its forecast of 1.5% U.S. GDP growth and 2.9% global growth for 2025, it included a caveat.

"If worst-case outcomes on tariffs are realized, even those forecasts may end up being too optimistic."

Barclays, on Wednesday, had slashed its year-end target for the S&P 500 from 6,600 points, to 5,900 points, the lowest among Wall Street brokerages. The S&P closed at 5,712.20 on Wednesday.

(Reporting by Siddarth S in Bengaluru; Editing by Savio D'Souza)