Analysts at the world’s largest bank say that a recession is more likely to happen than not.
Analysts at JP Morgan, the marketing side of JP Morgan Chase & Co., adjusted their prediction Thursday that the United States would experience a recession in the next year, raising their forecasts to a whopping 60 percent from an already troubling 40 percent, according to The Wall Street Journal.
This decision comes after Donald Trump announced sweeping 10 percent tariffs on imports from nearly every country in the world, with additional country-specific tariffs levied on top.
Analysts predicted that retaliatory tariffs could lead to huge disruptions in the supply chain, and that the tariff rate, which they expect to increase by 20 percentage points, would be equivalent to the biggest tax hike since 1968, which also led to a recession, according to Reuters.
Trump’s announcement continued to send the stock market tumbling Thursday, amid concerns over a global trade war. The Dow Jones Industrial Average lost 1,679.39 points, marking its worst session since June 2020, while the Nasdaq Composite saw its steepest drop since March 2020.
When Trump was asked about the crashing markets Thursday, Trump responded, “I think it’s going very well.” Blatant denial seems to be the name of the game messaging-wise, as the White House insisted that it was not watching the market.
Trump also enacted a “permanent” 25 percent tariff on all imported vehicles and autoparts—which is already kneecapping the U.S. auto industry. The president has already levied steep 25 percent tariffs on the U.S. closest trading partners Mexico and Canada.
Canadian Prime Minister Mark Carney announced Thursday that the era of U.S. global leadership on trade was “over,” and said his country would begin looking elsewhere for trade partnerships.
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