JPMorgan Predicts US Economy to Slow Down Due to Tariffs, 40% Chance of Recession

According to sources, JPMorgan analysts stated in a mid-year outlook report that US tariff policies may drag down global economic growth and reignite inflation in the US, with a 40% chance of recession in the second half of this year. The predicted US economic growth rate for 2025 is 1.3%, lower than the initial forecast of 2%. The stagflation effect of tariff hikes is cited as the reason for lowering GDP growth expectations this year. JPMorgan is bearish on the US dollar, citing slowing US economic growth and policies outside the US that support growth, which will boost other currencies, including emerging market currencies. The bank predicts that the Federal Reserve will cut interest rates by 100 basis points between December and spring 2026. Analysts stated that if an economic recession or slowdown exceeds expectations, it could trigger a more aggressive rate-cutting cycle. However, the bank remains optimistic about the US stock market, noting that despite policy uncertainties, consumers and the economy continue to show resilience.

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