JPMorgan Chase Sees Sluggish Growth Ahead, Dodges Recession

JPMorgan Chase's chief global strategist, David Kelly, has expressed a cautious outlook on the U.S. economy, suggesting that while the country may have dodged a recession, a period of sluggish growth is on the horizon. In a recent interview, Kelly highlighted several factors that could contribute to this economic slowdown, including tariffs and broader economic uncertainties. Despite these challenges, Kelly believes that the economy is resilient enough to withstand the impacts of slow growth without falling into a recession.

Kelly's optimism is partly based on recent developments such as the tariff pullback and the stimulus provided by the tax bill, which are expected to support the economy through 2025 and 2026. These measures, according to Kelly, have shifted the likelihood of a recession from "more than likely" to "less than likely" for this year. However, he also noted that consumer spending, a key driver of economic growth, is likely to contract due to the economic uncertainty and potential inflation from tariff impacts.

Kelly's comments reflect a broader sentiment within JPMorgan Chase about the economic outlook. The bank's CEO, Jamie Dimon, has also warned about the potential economic impacts of the ongoing trade war, suggesting that it could fuel inflation and slow growth. Dimon's warnings align with Kelly's assessment, emphasizing the need for vigilance in monitoring economic indicators and policy developments.

Despite the challenges ahead, JPMorgan Chase maintains a cautious optimism about the U.S. economy. While acknowledging the potential for a slowdown, the bank believes that the economy's resilience will help it navigate through the period of sluggish growth without falling into a recession. This outlook is based on a combination of recent positive developments and the bank's assessment of the economy's underlying strength.