JPMorgan cuts US growth outlook, warns of possible recession

JPMorgan lowered its US economic growth forecast, warning that Washington’s trade policies may accelerate inflation.

The bank sees a 40% chance of a recession in the second half of the year.

In a note today, June 25, the bank projected 2025 gross domestic product (GFP) at just 1.3%, down from a previous estimate of 2%. Elevated tariffs were the key reason behind the downgrade.

JPMorgan warned that current trade policy could revive fears of stagflation, slowing growth combined with rising prices, a scenario last seen in the 1970s.

The bank said the economic slowdown may weigh on the dollar, as foreign monetary policy continues to support local currencies, especially in emerging markets.

It also pointed to a likely drop in demand for US Treasuries from foreign investors, the Fed, and banks, as federal debt levels keep rising.

Despite these risks, JPMorgan kept a positive view on US equities, citing tech and AI strength, along with institutional buying during market pullbacks.