Wall Street Giants Warn of Rising Recession Risks as Economic Uncertainty Grows

U.S. recession fears have heightened as two major financial institutions warn of escalating economic risks linked to the current policy environment.

JPMorgan Chase has raised its probability of an economic downturn, now forecasting a 40% chance for 2025, up from an earlier 30%. The bank attributes the increased risk to the unpredictable nature of U.S. trade and fiscal policies, particularly President Trump’s ongoing trade conflicts with key global partners.

Similarly, Goldman Sachs has adjusted its own forecast, now predicting a 20% likelihood of a recession over the next 12 months. This revision follows persistent concerns over the effects of Trump’s economic agenda, which has caused growing uncertainty in global markets.

Both banks cite the instability induced by current U.S. policies as a major factor contributing to their bleak outlook.

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In addition, Jeffrey Gundlach, known as the “Bond King,” has issued a warning about the potential long-term impacts of capital shifts from the U.S. to Europe.

Gundlach suggests that Europe’s industrial revival could spark significant capital outflows from the U.S., reversing the trend that has seen American markets outperform global indices for years. He predicts that European equities might outperform U.S. stocks for an extended period, with early signs of this trend already appearing.

Alexander Stefanov