JPMorgan Predicts 2025 US Recession Amid Trump’s Aggressive Tariff Hikes
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The US economy is entering rough territory, with JPMorgan warning of a possible recession by the end of 2025. The main reason? President Trump’s aggressive new reciprocal tariffs. These tariffs are aimed at fixing long-standing trade imbalances by targeting countries with large trade surpluses against the US, including India. More tariff hikes are reportedly on the way. JPMorgan has predicted that the US economy will contract in 2025. Michael Feroli, the bank’s chief US economist, warned that the pressure from these new tariffs could push the country into recession, with unemployment expected to rise to 5.3%. Fed Chair Cautions on Growth and Inflation Federal Reserve Chair Jerome Powell also expressed concern, saying the tariffs could impact the economy more than expected. He warned that larger tariffs would likely lead to higher inflation and slower growth. JPMorgan expects inflation to reach 4.4% by the end of the year, up from 2.8% in February. The bank believes the Fed will start cutting interest rates in June and continue gradually until January 2026, eventually lowering rates to 2.75%-3%. However, Powell has suggested a cautious approach, saying there’s no need to rush despite the growing pressure. Global Ripple Effects: Trade War Escalates The global economy is now feeling the pressure of America’s trade war. China has already responded by imposing a 34% tax on US goods, and other countries are either threatening to retaliate or preparing for tough negotiations. China’s move shook the markets, triggering a major sell-off. Trump’s trade war has already wiped out more than $5 trillion from the US stock market. And JPMorgan isn’t alone in sounding the alarm—Barclays expects a downturn next year, Citi sees just 0.1% growth, and UBS has cut its forecast to 0.4%. Canadian Prime Minister Mark Carney criticized the US for backing away from its global…
Filed under: News - @ April 5, 2025 10:18 am