Global brokerages have significantly increased their recession odds, citing the impact of tariffs on business confidence and global growth. J.P. Morgan now sees a 60% chance of a U.S. and global recession by year-end, up from its previous estimate of 40%. Other major brokerages, including S&P Global, Goldman Sachs, and Deutsche Bank, have also raised their probability of a U.S. recession to between 30% and 35%.
The Trump administration’s imposition of tariffs on dozens of countries has sparked fears of an escalating trade war, which could lead to supply-chain disruptions and slow down global economic growth. The escalation has already had a significant impact on the S&P 500, with the benchmark index down over 8% so far this year.
While some analysts expect the prospect of further interest rate cuts by the Federal Reserve to dampen the tariff shock, most brokerages now predict higher rates of recession. Barclays and UBS warn that the US economy faces a higher risk of entering contraction territory if tariffs remain in place.
Brokerages have also slashed their year-end targets for U.S. stocks, with many predicting economic growth broadly between 0.1% and 1%. J.P. Morgan expects modest rate cuts to temper the tariff shock, while Goldman Sachs predicts three interest rate cuts by the end of the year.
As investors await further developments on trade policy and monetary policy, the outlook for global economic growth remains uncertain.
Source: https://www.reuters.com/markets/jpmorgan-lifts-global-recession-odds-60-us-tariffs-stoke-fears-2025-04-04