JPMorgan Raises Global Recession Odds to 60% on Trump Tariff Uncertainty

JPMorgan is predicting that the U.S. and potentially the global economy could be pushed into a recession if Trump’s reciprocal tariffs remain in place.

“The risk of recession in the global economy this year is raised to 60%, up from 40%,” JPMorgan chief economist Bruce Kasman said Thursday in a note to clients titled “There Will Be Blood.”

Kasman warned that the impact of the tariffs, which he referred to as the largest tax hike on U.S. households and businesses since 1968, would likely be magnified through retaliation, a slide in U.S. business sentiment and supply chain disruptions.

“We are not making immediate changes to our forecasts and want to see the initial implementation and negotiation process that takes hold,” he added. “However, we view the full implementation of announced policies as a substantial macroeconomic shock not currently incorporated in our forecasts. We thus emphasize that these policies, if sustained, would likely push the U.S. and possibly global economy into recession this year.”

The bank’s warning comes as U.S. stocks sunk for a second straight day, with the Dow Jones Industrial Average, Nasdaq and S&P 500 all down more than 3% on Friday morning. The Dow has tumbled over 1,300 points, while the Nasdaq dropped over 600 points and the S&P 500 fell more than 200 points.

Jobs came in stronger than expected in March, however, with nonfarm payrolls increasing 228,000 for the month, up from the revised 117,000 for February, per the Bureau of Labor Statistics. However, the unemployment rate moved up to 4.2%, higher than the 4.1% forecast.

The motion picture and sound recording industries lost 1,200 jobs for a total of 409,000 for the month, while broadcast and content providers shed 800 positions for a total of 331,200 and publishing shed 1,500 for a total of 920,000.

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