J.P. Morgan Economist: 40% Chance of U.S. Recession This Year

Bruce Kasman, Chief Economist at J.P. Morgan, has warned that there is a 40% chance of a U.S. recession this year. He also highlighted potential risks that could damage the country’s position as a top investment destination.

"Right now, we are seeing growing concerns about the U.S. economy," Kasman stated, as reported by Reuters on Sunday (March 16, 2025).

Kasman previously estimated the risk of a U.S. recession at 30%, but he has now revised it up to 40%. Meanwhile, J.P. Morgan currently projects that U.S. GDP growth will reach only 2% this year.

U.S. Stock Market Under Pressure as Concerns Over Trump’s Policies Grow

U.S. stock markets have been declining in recent days as investors grow increasingly anxious that President Donald Trump’s import tariffs could slow economic growth.

This sentiment is echoed in a Reuters survey conducted last week among economists in Canada, Mexico, and the U.S.. The results revealed that 95% of respondents believe recession risks have increased due to Trump’s tariff policies.

Similarly, Goldman Sachs and Morgan Stanley have downgraded their U.S. economic growth projections, now forecasting GDP growth of just 1.7% and 1.5% for 2025, respectively.

Kasman further warned that the risk of a recession could rise to 50% or more if Trump proceeds with his threatened retaliatory tariffs in April.

"If we continue down this path with increasingly harmful and business-unfriendly policies, I believe the risk of an economic downturn will rise," Kasman said.

Impact on Investor Confidence

Kasman also emphasized that political uncertainty in the U.S. could erode investor confidence in American assets.

"The U.S. has long been seen as a place where investors can trust the rule of law, rely on the integrity of information flows, and feel assured that the government will not interfere unpredictably with the rules of the game," he explained.

However, he warned that budget cuts for government agencies, shifts in U.S. foreign policy, and the recent decision to dissolve advisory committees that assist with data collection could undermine this trust.

"All of these factors contribute to the uncertainty in U.S. policy, adding to the risks in this year’s economic outlook that I believe have yet to be fully accounted for," he concluded.