JPMorgan: "US Recession Probability This Year from 30% to 40%"

"If reciprocal tariffs actually take effect, recession risk could exceed 50%"

"If Trump administration undermines trust in US, position as investment destination could be damaged"

JPMorgan forecasts that the probability of the US falling into a recession this year is about 40%. The bank also stated that if the reciprocal tariffs threatened by President Trump from April actually take effect, the risk of recession could rise to over 50%. This indicates that the risk of recession increases if the US continues more destructive and business-unfriendly policies.

The bank also warned that if the Trump administration undermines trust in the US, there is a risk of permanent damage to America's status as an investment destination.

According to Reuters on the 12th (local time), Bruce Kasman, JPMorgan's chief global economist, said, "Concerns about the US economy are currently heightened." He hasn't officially revised his forecast yet but said he has incorporated a 40% recession risk into his outlook. This is higher than the 30% recession probability from earlier this year. He also predicted that if reciprocal tariffs actually take effect, the recession risk could rise to over 50%.

JPMorgan also expects US GDP to grow by 2% this year.

US stocks plummeted this week by the largest margin in months. This is due to growing anxiety that Trump's tariff policies could push the US economy into recession.

Economists at Goldman Sachs and Morgan Stanley lowered their US GDP growth forecasts last week, predicting growth rates of 1.7% and 1.5% respectively for this year. According to a Reuters poll of economists in the US, Canada, and Mexico last week, 95% responded that Trump's tariffs increased the risk of economic recession in their respective countries.

He also said that if trust in US markets and institutions is challenged by the Trump administration's style, investors' confidence in US assets will also be shaken.

Kasman said that the Trump administration's reduction of government agencies, changes in the US role in the world, and decisions to disband data collection advisory committees could damage trust and expectations for US markets.

"All these things are part of the uncertainty that will appear in US policy, and that risk is not properly reflected in this year's outlook," he said. He added, "The US has the tremendous privilege of being able to raise funds at much lower costs and having much larger capital flows and the attractiveness of the dollar and assets." He emphasized that the risk of that coming under pressure and becoming a structural problem in the market should never be underestimated.

Kim Jung-a, Contributing Writer kja@hankyung.com