John Deo

Recession Risk Climbs Amid Trade Policy Uncertainty

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    Posted by John Deo Mar 12 - Filed in General - #financialmodelingprep  - 7 views

    Introduction

    The probability of a U.S. recession in 2025 now stands at 40%, according to Bruce Kasman, J.P. Morgan’s chief global economist. Speaking in Singapore, Kasman raised his recession forecast from 30% at the start of the year and warned that the risk could surpass 50% if new reciprocal tariffs come into effect in April.

    Key Takeaways

    1. Recession Risks Are Growing

    • J.P. Morgan now projects a 40% recession probability in 2025, up from 30%.
    • Risks could surpass 50% if Trump follows through with new trade tariffs.
    • Current U.S. GDP growth forecast: 2%, but downside risks are increasing.

    2. Market Selloff and Growth Downgrades

    • The recent stock market decline has been the sharpest in months, reflecting investor anxiety.
    • Goldman Sachs and Morgan Stanley have cut their GDP growth forecasts to 1.7% and 1.5%, respectively.
    • Investor confidence is at risk due to policy unpredictability and market uncertainty.

    3. Impact on Investor Sentiment

    Kasman emphasized that uncertainty over trade policies and government intervention could erode confidence in U.S. assets. Investors rely on:

    • Rule of law and regulatory stability
    • Transparency in information flow
    • Predictable government involvement in economic policy

    Market Monitoring & Data Insights

    For real-time economic tracking, consider using:

    Conclusion

    The risk of a U.S. recession is rising, fueled by tariff uncertainty, market selloffs, and weakening economic forecasts. If trade tensions escalate, economic growth could deteriorate further, potentially pushing recession risks beyond 50%. Investors should stay informed and monitor real-time economic data to navigate the evolving landscape.