Trump tariff effect: Global brokerages raise recession odds; J.P.Morgan sees 60% chance

J.P. Morgan predicts U.S. recession due to Trump's tariffs, with global economy at 60% risk, prompting interest rate cuts.

J.P.Morgan ratcheted up its odds for a U.S. and global recession to 60%, as brokerages scrambled to revise their forecast models with tariff distress threatening to sap business confidence and slow down global growth. The Trump administration imposed tariffs on dozens of countries earlier this week.

China retaliated on Friday with its own levies on U.S. goods, adding to worries about an escalating trade war and wreaking havoc on global financial markets.

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J.P.Morgan said it now sees a 60% chance of the global economy entering recession by year end, up from 40% previously.

“Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year,” the brokerage said in a note on Thursday, adding that the country’s trade policy has turned less business friendly than anticipated.

“The effect ... is likely to be magnified through [tariff] retaliation, a slide in U.S. business sentiment and supply-chain disruptions.”

S&P Global also raised its “subjective” probability of a U.S. recession to between 30% and 35%, from 25% in March.