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.
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.
The US Senate has made a pivotal move toward averting a government shutdown by passing a Republican-backed spending bill.
Billionaire investor Marc Lasry has voiced concerns that economic instability under Donald Trump’s policies—particularly tariffs—could discourage investment and increase the likelihood of a recession.
Investor Tom Lee has expressed his belief that the market’s reaction to the Trump administration’s tariffs was overly dramatic.
Donald Trump has threatened new tariffs on the EU in response to its planned countermeasures against his steel and aluminum duties.