U.S. recession risk at 40%, warns J.P. Morgan’s chief economist

Published 12/03/2025, 08:50
© Reuters

Investing.com -- The probability of a U.S. recession taking place this year stands at around 40%, according to Bruce Kasman, J.P. Morgan’s chief global economist.

Kasman was speaking to reporters in Singapore on Wednesday, according to Reuters, where he voiced his growing concern about the U.S. economy.

While he has not yet adjusted any forecasts, he has incorporated an approximately 40% risk of recession into his outlook, a considerable increase from the 30% he had initially projected at the beginning of the year.

Kasman warned that the risk of a recession could climb even higher, potentially exceeding 50%, if the reciprocal tariffs Trump has threatened to impose from April were to effectively come into force. He expressed his concern that the continuation of disruptive, business-unfriendly policies would heighten the risk of a recession.

Currently, J.P. Morgan’s forecast for U.S. GDP growth this year is 2%. However, recent days have seen the harshest selloff in U.S. stocks in months, as investors grow apprehensive that President Donald Trump’s import duties could decelerate the economy. 

This sentiment is echoed by economists at Goldman Sachs and Morgan Stanley (NYSE:MS), who have downgraded their U.S. GDP growth forecasts to 1.7% and 1.5% respectively for this year.

Kasman also noted that the administration’s approach could potentially undermine investor faith in U.S. assets if it were to challenge the long-established trust in U.S. markets and institutions.

He emphasized the importance of investors’ confidence in the rule of law, the integrity of information flow, and the government’s predictable involvement in the rules of the game in the U.S.

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