President Trump referred to Wednesday as "Liberation Day" as he enacted "reciprocal" tariffs against even more countries across the globe, but now JPMorgan is warning that the risk of recession just escalated steeply. In a Thursday note, the Wall Street giant's strategists, led by Bruce Kasman, say the risk of both a US and global recession sometime this year has risen from 40% to 60%, with "disruptive US policies" fingered as "the biggest risk to the global outlook," reports Reuters.
"The effect of this tax hike is likely to be magnified through retaliation, a slide in US business sentiment, and supply chain disruptions," the note said. Fellow brokerages Barclays and Deutsche Bank have issued their own warnings about a looming recession if the Trump administration doesn't let up on the tariffs. Paul Donovan, chief economist at UBS Global Wealth Management, expressed similar concerns, telling CNN that at the beginning of 2025, the US economy was "in a very good place," but that "if these tariffs continue as they are, [the economy will] probably tip into recession."
"The US isn't sneezing, the US is hacking off one of its limbs," Donovan adds. JPMorgan also notes that price surges will come about for American consumers, predicting a 2% addition to the Consumer Price Index this year. One person who doesn't seem too concerned: the US commander in chief. "I think it's going very well—The MARKETS are going to BOOM," Trump wrote on Truth Social on Thursday, adding in a separate Friday post: "TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!" More here on the possible domino effect regarding the world economy. (More JPMorgan Chase stories.)
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