JPMorgan Predicts 2025 U.S. Recession Due to Trump Tariffs, 60% Probability

JPMorgan has issued a stark warning, becoming the first major financial institution to officially predict that the United States will enter a recession in 2025. This forecast is directly linked to the sweeping new tariffs imposed by President Trump. The bank's economists anticipate that the hefty tariff plan will significantly burden the U.S. economy, leading to a contraction in real GDP. Specifically, JPMorgan expects real GDP to decline by 0.3 percent for the full year, marking a notable shift from previous growth projections.

The bank's analysis suggests that the tariffs will have a profound impact on various economic indicators. Job losses are anticipated as businesses struggle to adapt to the increased costs associated with tariffs. Additionally, the GDP is expected to slump, further exacerbating the economic downturn. Price surges are also predicted as the tariffs drive up the cost of goods, affecting both consumers and businesses alike.

JPMorgan's economists have raised the probability of a U.S. and global recession to 60 percent, reflecting the significant economic distress caused by the tariffs. This revision in forecast models underscores the severity of the situation and the potential for widespread economic repercussions. The bank's projections indicate that the full impact of the tariffs will be felt in the second half of 2025, with the economy likely to enter a recession during this period.

The tariffs are expected to create a ripple effect across the global economy, with other nations potentially retaliating with their own trade measures. This could further strain international trade relations and exacerbate the economic downturn. JPMorgan's forecast serves as a stark warning to policymakers and businesses, highlighting the need for careful consideration of trade policies and their potential consequences. The bank's analysis underscores the importance of maintaining stable economic conditions and avoiding policies that could lead to a recession.