Title: JPMorgan Raises U.S. Recession Probability to 35%: What You Need to Know
JPMorgan Chase has recently increased the chances of a U.S. recession to 35% by the end of this year, citing softening labor market conditions. This shift in assessment comes after the release of the July jobs report, which indicated a sharper-than-expected weakening in labor demand and early signs of labor shedding.
The investment banking firm also predicts a 45% probability of a recession by the second half of 2025 and anticipates that the Federal Reserve will lower interest rates by 50 basis points in both September and November. This accelerated pace of rate cuts is in response to the potential global recession that could trigger a cutting cycle from central banks.
Goldman Sachs, another major investment bank, has also revised its estimates, now suggesting a 25% chance of a recession in the next year. However, they are less concerned, noting that the economy looks fine overall and the Federal Reserve has room to act quickly if necessary.
Despite initial market jitters following the July jobs report, which showed an increase in unemployment, markets have rebounded. The S&P 500 even experienced one of its best days of the year following a strong weekly jobless claims report.
In conclusion, investors should keep a close eye on the evolving economic indicators and be prepared for potential market volatility. It’s essential to stay informed and consider adjusting investment strategies to navigate uncertain times ahead.