​​J.P. Morgan: Global Recession Risk Rises to 60%​​

Summary​​: J.P. Morgan Chief Economist Bruce Kasman analyzes how the negative impacts of recent tariffs will be significantly amplified by retaliatory measures from trading partners, declining U.S. business confidence, and global supply chain disruptions.

Full Translation​​:
J.P. Morgan issued a stark warning that if the Trump administration’s newly announced tariffs on U.S. trade partners remain in place, the U.S. and global economy could plunge into recession in 2025.
In a Thursday report titled “There Will Be Blood”, Chief Economist Bruce Kasman stated that the tariffs represent the largest tax hike on U.S. households and businesses since 1968. He wrote:

“This year’s risk of a global economic recession has risen from 40% to 60%.”

J.P. Morgan: global recession risk rises to 60%​

Kasman emphasized that the adverse effects of the tariffs will be magnified by factors including retaliatory trade policies, eroding U.S. business sentiment, and supply chain fragmentation.
​​Market Turmoil​​:
Following the tariff announcement, financial institutions across Wall Street issued recession alerts for the U.S., with some now listing it as their baseline scenario. Global markets reacted violently, with the S&P 500 recording its worst single-day performance since 2020.
​​J.P. Morgan’s Cautious Stance​​:
Despite escalating risks, J.P. Morgan has adopted a “wait-and-see” approach, opting not to revise its official economic forecasts immediately. Kasman explained:

“We will not alter our projections now but will closely monitor the initial implementation and negotiation progress.”

However, he stressed that if the tariffs are fully and persistently enforced, they would constitute a “major macroeconomic shock” not yet accounted for in current models. He reiterated:

“If these policies endure, they are highly likely to push the U.S.—and potentially the global economy—into recession this year.”

Broader Implications​​:
The analysis highlights that the tariffs’ coverage spans 60 trade surplus nations, including China, the EU, and even remote regions like Antarctica, reflecting an unprecedented breadth of economic coercion. Supply chain experts warn of widespread price hikes for goods ranging from daily essentials (coffee, sugar) to durable items (cars, appliances), further straining household budgets and business operations.
​​Policy Risks​​:
Kasman’s team warns that the tariffs’ fiscal tightening effect—equivalent to a 2.4% GDP contraction—could mirror post-WWII fiscal policies in severity. The interplay of retaliatory measures, collapsing business confidence, and fractured supply chains may trigger a downward spiral, even if immediate economic resilience masks deeper vulnerabilities.
​​Investor Reactions​​:
Major institutions, including Goldman Sachs and UBS, have upgraded recession probabilities for the U.S., with projections ranging from 30% to 60%. Meanwhile, central banks face pressure to accelerate rate cuts, with institutions like Morgan Stanley forecasting three 25-basis-point reductions by the Federal Reserve in 2025.