Wall Street is increasingly predicting that the U.S. will plunge into a recession within the next year as the global stock market downturn continues.
JP Morgan has raised the probability of a recession in the U.S. this year from 25% to 35% and forecasts a 45% chance by the second half of 2025.
Economist Bruce Kasman noted that U.S. economic news suggests a sharper-than-expected weakening in labour demand and early signs of job cuts.
This comes after recent employment data revealed that the American economy added far fewer jobs than anticipated, with unemployment reaching a three-year high.
All major stock indexes on Wall Street fell on Wednesday, and many Asian markets continued to decline overnight following the global sell-off that erased billions from stock values.
JP Morgan warned that about a quarter of the global carry trade, which contributed to the market’s sharp decline, has yet to unwind.
Additionally, CEO Jamie Dimon expressed scepticism that inflation will return to the Federal Reserve’s 2% target, citing high deficit spending and global military tensions involving China and Russia.
