JPMorgan Chase & Co. has raised its estimate of the probability of the United States slipping into an economic recession to 35 percent by the end of this year, compared with an estimate of 25 percent at the beginning of last month, according to Bloomberg Economics.
The U.S. data “point to sharper-than-expected weakness in labor demand and early signs of layoffs,” JPMorgan economists led by Bruce Kasman wrote in a note to clients.
Bloomberg added that the team expects the chances of an economic recession by the second half of 2025 to reach 45 percent.
“This modest increase in the assessment of recession risks is distinct from the Bank’s more significant reassessment of interest rate expectations,” Kasman and his colleagues wrote in the note.
The agency said that the bank now sees only a 30 percent chance that interest rates will remain “high for an extended period,” compared to a 50-50 assessment just two months ago. With inflation pressures in the United States easing, JPMorgan expects the Federal Reserve to cut interest rates by half a percentage point in September and November.
The past few days have witnessed a significant decline in global stock markets, as trading screens in the United States, Asia, and Europe to some extent, were filled with red stocks heading downwards.
