Experts at JP Morgan have assessed that the probability of an economic recession in the United States this year has risen to 40%, amid growing concerns over the impact of trade policies and political uncertainty on investor confidence.
Bruce Kasman, the bank's chief economist, clarified that the estimates have not been officially revised yet, but economic risks are increasing, prompting a raise in the likelihood of recession from 30% to 40% since the beginning of the year, although current forecasts still indicate a 2% growth in U.S. GDP by 2025.
Kasman mentioned that the risk of recession could surpass 50% if the U.S. administration proceeds with implementing reciprocal tariffs starting in April. He added that ongoing unstable policies could lead to a loss of investor confidence in American assets, which may negatively affect capital flows and the borrowing costs for the U.S. government.
He also warned that political uncertainty in the U.S., cuts affecting some government agencies, and changes in the global role of the U.S. could harm the country's economic standing in the long term.
The chief economist at JP Morgan pointed out that the U.S. has long enjoyed major financial advantages, such as low financing costs and the attractiveness of the dollar, thanks to investor confidence in the stability of its economic institutions. However, he added that these advantages could come under pressure if political uncertainty persists, noting that unexpected decisions, such as disbanding economic advisory committees, could undermine market confidence in the sustainability of U.S. policies.
These statements come at a time when U.S. financial markets have experienced a sharp sell-off, as fears have increased that President Donald Trump's trade policies, including tariffs on imports, could hinder economic growth. A Reuters survey revealed that 95% of economists in the U.S., Canada, and Mexico believe that recession risks have increased due to these tariffs.
