Bruce Kasman, J.P. Morgan’s chief global economist, has raised his assessment of the U.S. economy’s near-term vulnerability, increasing the likelihood of a recession in 2025 to 40% from an earlier 30% estimate. Speaking with reporters in Singapore, Kasman kept J.P. Morgan’s baseline forecast of roughly 2% GDP growth for the year, but warned that outlook could deteriorate if President Trump follows through on threatened reciprocal tariffs this April. Should those tariffs be implemented, Kasman said the probability of recession could rise to 50% or more.
Kasman’s view reflects growing unease among economists about trade policy and its potential to disrupt growth. In a recent survey of economists across the U.S., Canada and Mexico, 95% said Trump’s tariff proposals have raised recession risks. The near-term channel is straightforward: tariffs can raise costs for businesses and consumers, disrupt supply chains and slow investment, all of which reduce demand and growth.
Other major investment banks have already trimmed their growth projections in response to rising trade tensions and other headwinds. Goldman Sachs now forecasts U.S. GDP will expand by about 1.7% this year, while Morgan Stanley has lowered its projection to roughly 1.5%. Those downgrades show how sensitive forecasts have become to policy shifts and geopolitical uncertainty.
Beyond the immediate effect on growth, Kasman warned of longer-term consequences if policymakers pursue repeated or unpredictable trade actions. He suggested that sustained uncertainty or hostile trade measures could erode international confidence in U.S. markets and institutions. That loss of trust could make the United States a less attractive destination for foreign capital and long-term investment, amplifying the economic cost beyond the initial tariff shock.
For now, J.P. Morgan’s central forecast remains a modest expansion, but risks are skewed to the downside. A combination of tariff escalation, slower global growth, and reduced investment could push the economy from lukewarm expansion into contraction. Markets and businesses will be watching closely for policy moves in April and for signs that uncertainty is easing or intensifying.
Kasman’s remarks underscore how policy choices can shift not only headline growth forecasts but also investors’ and businesses’ expectations. When forecasts are cut and perceived risks rise, firms may delay hiring or capital spending, creating a feedback loop that further weakens growth. That dynamic is what makes trade policy a powerful, and potentially destabilizing, factor for the U.S. outlook.
In summary, J.P. Morgan’s chief economist increased the calculated chance of a 2025 recession to 40%, while retaining a baseline 2% GDP forecast. The risk could climb substantially if threatened tariffs are enacted, and the broader concern is that recurring policy uncertainty could erode confidence in the U.S. as a stable investment environment. Other major banks have already trimmed growth expectations, illustrating how sensitive the outlook has become to policy and global developments.