JPMorgan Chase: Bloodshed is imminent! The probability of a global recession has increased to 60%
The bank's chief economist, Kassman, analyzed that the negative impact of this round of tax increases is expected to be significantly amplified due to factors such as retaliatory actions from trade partners, a decline in American business confidence, and disruptions in the global supply chain
JP Morgan's latest warning indicates that if the Trump administration continues to implement the tariff policy imposed on U.S. trading partners, it could lead to a recession in the U.S. and even the global economy by 2025.
The bank's chief economist, Bruce Kasman, stated in a report released on Thursday titled "There will be blood" that this round of tariffs represents the largest tax increase on American households and businesses since 1968. He wrote in the report:
"The probability of a global economic recession this year has risen from 40% to 60%."
Kasman analyzed that the negative impact of this tax increase is expected to be significantly amplified due to retaliatory actions from trading partners, a decline in U.S. business confidence, and disruptions in global supply chains.
Following the announcement of the tariff measures, the market reacted swiftly. Several institutions on Wall Street have issued alarms about a recession in the U.S., with some even listing it as a baseline forecast scenario. Global financial markets also experienced severe turbulence, with the S&P 500 index recording its worst single-day performance since 2020.
Despite the significant upgrade in risk assessment, JP Morgan is currently choosing to adopt a "wait-and-see" strategy and has not yet revised its official economic forecasts, intending to observe the initial implementation effects of the policy and the progress of subsequent negotiations. Kasman stated in the report:
"We will not immediately change our forecasts, but rather hope to see a smooth initial implementation and negotiation process."
However, Kasman emphasized that if the announced tariff policies are fully and continuously implemented, they would constitute a "significant macroeconomic shock," which has not yet been incorporated into the current forecasting model. He reiterated:
"If these policies persist, they are very likely to push the U.S. economy, and potentially the global economy, into recession this year."