John Deo

U.S. Recession Risks Rise to 40% as Trade Tensions Escalate — J.P. Morgan

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    Posted by John Deo Mar 12 - Filed in General - #financialmodelingprep  - 5 views

    Bruce Kasman, J.P. Morgan’s Chief Global Economist, has raised the U.S. recession probability to 40%, citing increasing risks tied to Trump’s proposed tariffs and a deteriorating economic outlook.

    Key Takeaways from J.P. Morgan's Outlook

    Recession Probability

    • Current Risk Estimate: 40% (up from 30% earlier this year)
    • Potential Risk: Could exceed 50% if reciprocal tariffs are enforced in April.

    GDP Growth Forecasts

    • J.P. Morgan: 2% growth for 2025
    • Goldman Sachs: 1.7%
    • Morgan Stanley: 1.5%

    Market Sentiment

    • Recent stock market selloffs reflect heightened investor concerns over import duties and broader economic uncertainty.
    • Kasman warned that further instability could damage investor confidence in U.S. markets and institutions.

    Investment Implications

    Given rising recession risks and potential tariff escalations, investors should consider strategies that emphasize resilience and stability. Tools like the Economic Indicators API can help track inflation, GDP, and employment data to assess real-time economic shifts.

    Investment Strategies to Consider

    \u2705 Defensive Stocks: Focus on sectors like healthcare, utilities, and consumer staples that tend to perform well during economic downturns.
    \u2705 Fixed Income Investments: With bond yields poised to decline if recession risks grow, adding duration exposure may offer protection.
    \u2705 Diversification: Reducing reliance on U.S.-centric assets by incorporating international equities or commodities could mitigate downside risks.