J.P. Morgan Forecasts 40% Chance of U.S. Recession This Year

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Bruce Kasman, J.P. Morgan’s chief global economist, has raised the probability of a U.S. recession occurring this year to around 40%. Speaking to reporters in Singapore on Wednesday, Kasman expressed growing concerns about the U.S. economy, highlighting the potential risks posed by trade policies.

Although Kasman has not adjusted his economic forecasts yet, he has factored in a 40% chance of recession, up from the 30% he initially estimated at the start of the year. He cautioned that this risk could increase even further, potentially surpassing 50%, if President Trump's proposed reciprocal tariffs come into effect in April. Kasman warned that continued disruptive and business-unfriendly policies could significantly elevate the likelihood of a recession.

Currently, J.P. Morgan’s U.S. GDP growth forecast for the year stands at 2%. However, the recent sharp decline in U.S. stock markets reflects growing investor concerns that Trump's import duties could slow down the economy. This sentiment is echoed by Goldman Sachs and Morgan Stanley, both of which have downgraded their GDP growth predictions to 1.7% and 1.5%, respectively.

Kasman also noted that the administration's approach could undermine investor confidence in U.S. assets if it erodes trust in U.S. markets and institutions. He stressed the importance of maintaining confidence in the rule of law, the integrity of information, and the government's consistent involvement in the economy.

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