Given the ongoing volatility of the US economy, JPMorgan Chase warns that a recession cannot be ruled out.
In an analyst note published on Wednesday, JPMorgan economists raised the probability of a recession this year from 25% to 35% and pointed out that there is also a 45% chance of a recession in the second half of 2025.
Related: Stock market plunges after global sell-off as investors panic over jobs report and economic indicators
“Wage inflation in the United States is currently slowing in a way that is not seen in other industrialized countries. [developed market] economies,” the statement said. “The easing of labor market conditions increases confidence that both services price inflation will decline and that current Fed policy is hawkish.”
The statement also said the bank expects the Federal Reserve to cut interest rates in September and November 2024.
Jamie Dimon, CEO of JPMorgan Chase, reiterated his prediction in an interview with CNBC, saying he believes a recession could be imminent.
Related: Jamie Dimon's political advice for Donald Trump and Kamala Harris
“There's a lot of uncertainty out there. I've always pointed to geopolitics, housing, deficits, spending, quantitative tightening, elections, all of these things are causing some consternation in the markets,” he said. “I'm absolutely optimistic that we could handle a mild recession, even a harder one.”
The bank's predictions followed last week's employment report, which found that the unemployment rate reached 4.1% in June.
It was a volatile week for the Dow, S&P 500 and Nasdaq due to increased concerns about the US economy.