JPMorgan Chase Increases U.S. Recession Risk to 40%
- JPMorgan Chase economists update U.S. recession odds to 40% for 2025.
- Revised forecast reflects labor and policy concerns.
- Market reacts to potential Federal Reserve rate changes.
JPMorgan Chase raises the likelihood of a U.S. recession to 40% for 2025, based on analysis by its economists.
This adjustment signals potential shifts in market dynamics and policy stances amidst changing economic indicators.
JPMorgan Raises 2025 Recession Probability to 40%
The revised projection from JPMorgan Chase reflects increasing economic uncertainties for 2025. Prior forecasts pegged the recession probability at 30%, highlighting a shift in expectations.
Chief Economist Bruce Kasman and his team note concerns about labor market conditions and U.S. economic policies as driving factors. The updated forecast draws from primary source insights.
Federal Reserve Rate Cuts Anticipated in Market Response
The increased probability of a recession could influence financial markets, with potential changes in stock market dynamics. Analysts are closely watching policy responses.
JPMorgan anticipates the Federal Reserve will cut interest rates twice this year, due to easing labor market conditions. These moves are seen as efforts to prevent economic stagnation.
“U.S. wage inflation is now slowing in a manner not seen in other DM economies. Easing labor market conditions increase confidence both that service price inflation will move lower and that the Fed’s current policy stance is restrictive.”
— Bruce Kasman, Chief Economist and Managing Director of Global Research, JPMorgan Chase
Echoes of Caution from Morgan Stanley and Goldman Sachs
JPMorgan’s revised forecast is reminiscent of adjustments made by Morgan Stanley and Goldman Sachs. Such forecasts point to broader economic apprehensions.
Experts, including Jamie Dimon, express optimism that a mild recession would be manageable, though concerns remain for those potentially facing job losses.
“I’m fully optimistic that if we have a mild recession or even a harder one, we would be okay. Of course, I’m very sympathetic to people who lose their jobs. You don’t want a hard landing.”
— Jamie Dimon, CEO, JPMorgan Chase
