JPMorgan Chase raises probability of U.S. recession to 35% by year end

JPMorgan now sees a 35% chance that the U.S. economy will fall into recession by the end of this year, up from 25% at the beginning of last month. JPMorgan economists led by Bruce Kasman wrote in a note to clients on Wednesday that the news from the U.S. "suggests that labor demand has weakened more sharply than expected, with early signs of layoffs emerging." The team maintained the probability of a recession by the second half of 2025 at 45%. "Our modest upward revision to our assessment of recession risks is more significant than our larger revision to our assessment of the interest rate outlook," Kasman and his colleagues wrote. JPMorgan now sees only a 30% chance that the Federal Reserve and other central banks will keep interest rates high for a long time, down from a 50% chance just two months ago. As U.S. inflation pressures decline, JPMorgan expects the Fed to cut interest rates by 50 basis points in September and November. (Jinshi)