JP Morgan predicts US recession by 2025-end due to Trump tariffs

JPMorgan Chase & Co. said it expects the US economy to fall into a recession this year after accounting for the likely impact of tariffs announced this week by the Trump administration. “We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3 per cent, down from 1.3 per cent previously,” the bank’s chief US economist, Michael Feroli, said Friday in a note to clients, referring to gross domestic product. “The forecasted contraction in economic activity is expected to depress hiring and over time to lift the unemployment rate to 5.3 per cent,” Feroli said.
Donald Trump’s announcement on Wednesday of major tariffs on US trading partners around the world, including India, sent the S&P 500 index of US stocks to its lowest level in 11 months, wiping away $5.4 trillion of market value in just two trading sessions to close out the week.
JPMorgan’s forecast came alongside similar changes from other banks, which have been slashing projections for US growth this year since the tariff announcement. On Thursday, Barclays Plc said it expects GDP to contract in 2025, “consistent with a recession.” On Friday, Citi economists cut their forecast for growth this year to just 0.1 per cent, and UBS economists dropped theirs to 0.4 per cent.
“We expect US imports from the rest of the world fall more than 20 per cent over our forecast horizon, mostly in the next several quarters, bringing imports as a share of GDP back to pre-1986 levels,” UBS Chief US Economist Jonathan Pingle said in a note. “The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy.” “The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy,” the note added.