JP Morgan expects the U.S. economy to experience stagflationary slowing due to tariffs, with a 40% chance of a recession.

BlockBeats News, June 26th - JPMorgan Chase analysts said on Wednesday in a mid-year outlook research report that U.S. tariff policy may drag down global economic growth and reignite inflation in the United States. The bank believes there is a 40% probability of the U.S. falling into a recession in the latter half of this year. The U.S. economic growth rate is expected to be 1.3% in 2025, lower than the initial forecast of 2% at the beginning of the year. "The stagflation effect brought about by tariff increases is the reason for our downward revision of this year's GDP growth expectations," the report stated.

JPMorgan Chase is bearish on the U.S. dollar, citing the slowing U.S. economic growth, while policies supporting growth outside the U.S. will boost other currencies, including those of emerging markets. The bank expects the Federal Reserve to cut interest rates by 100 basis points between December and the spring of 2026. Analysts stated that if an economic recession occurs or if the economic slowdown exceeds expectations, it will trigger a more aggressive rate-cutting cycle. However, the bank remains optimistic about the U.S. stock market, as despite policy uncertainties, consumers and the economy still show resilience. (FXStreet)