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JPMorgan forecasts a contraction in US GDP to -0.3% due to President Trump's tariffs, predicting a rise in unemployment to 5.3%. The S&P 500 dropped significantly, erasing $5.4 trillion in market value, while other banks also revised growth projections downward. Fed Chair Jerome Powell indicated a cautious approach to interest rate adjustments amid rising inflation concerns.
JP Morgan predicts a recession in the US this year due to President Trump's new tariffs, forecasting a GDP contraction of -0.3% and an unemployment rate rise to 5.3%. The tariffs have already caused significant market declines, with the S&P 500 dropping to its lowest in 11 months, erasing $5.4 trillion in value. The Federal Reserve is expected to cut interest rates in response, despite rising inflation concerns.
JPMorgan Chase & Co. forecasts a US recession this year, projecting a real GDP contraction of -0.3% due to recent tariffs imposed by the Trump administration. The anticipated economic downturn is expected to increase the unemployment rate to 5.3%, while the Federal Reserve may begin cutting interest rates despite rising inflation.
JPMorgan has become the first major Wall Street bank to predict a US recession in late 2025, attributing it to the impact of President Trump's tariffs. Chief economist Michael Feroli forecasts a two-quarter contraction in GDP, with unemployment rising to 5.3% as inflation pressures persist, leading to a potential stagflationary environment. The Federal Reserve may face challenges in adjusting monetary policy, with expectations of interest rate cuts beginning in June.
Donald Trump's newly announced tariffs, including a 10% baseline on all U.S. imports and higher rates on specific countries, could push the U.S. economy towards recession by increasing inflation and reducing consumer spending, according to JP Morgan's chief economist. The tariffs are projected to generate $400 billion in revenue but may lead to a significant contraction in real disposable income and consumer spending in the coming quarters. Global leaders are preparing retaliatory measures, raising concerns about widespread economic repercussions.
Asian stock markets opened positively, buoyed by better-than-expected US inflation data and the avoidance of a government shutdown. The Shanghai index rose 0.2%, while the Nikkei gained 0.9%, driven by technology stocks. Analysts anticipate a 75 basis point rate cut from the US Federal Reserve next year amid inflation concerns.
Wall Street opened mixed as the SMI rose, while oil prices fell. Asian markets showed positive trends, with the Shanghai index up 0.2% and Tokyo's Nikkei gaining 0.9%, driven by strong technology stocks. Analysts predict potential rate cuts from the Fed next year amid inflation concerns.
Asia-Pacific markets showed mixed results following Donald Trump's election victory, with Taiwan's economy minister indicating support for companies relocating production from China due to anticipated tariffs. The Philippines' GDP growth slowed to 5.2% in Q3, while China's exports surged 12.7% in October, despite a decline in imports. Electric vehicle stocks faced pressure, particularly after Trump's win, with analysts noting potential benefits for traditional automakers like Ford and GM under a less stringent regulatory environment.
Michael Feroli
People
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