The U.S. economy is facing a severe downturn, with J.P. Morgan’s chief global economist, Bruce Kasman, now warning that there is a 40% chance of a full-blown recession—largely due to Donald Trump’s economic policies. This marks a sharp increase from the 30% risk Kasman estimated earlier this year, with the likelihood of a recession rising further if Trump follows through on his proposed reciprocal tariffs.
A Looming Economic Crisis
Kasman’s warning signals a major red flag for both investors and policymakers. “Where we stand now is with a heightened concern about the U.S. economy,” he stated, citing Trump’s erratic policy decisions and trade tariffs as major destabilizing factors.
If Trump proceeds with additional tariffs, the recession risk could surge to 50% or higher. “If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,” Kasman explained.
Loss of Investor Confidence
A key concern among economists is that Trump’s unpredictability could lead to a fundamental loss of trust in U.S. assets. “The U.S. seems to have established itself as a place where people can be comfortable about rule of law, about the integrity of information flow, and that the government isn’t going to unexpectedly interfere in the rules of the game,” Kasman warned. “The risk that this status comes under pressure and becomes a structural issue in the markets is not something I would, by any means, underplay.”
Economic Growth Projections Slashed
Goldman Sachs and Morgan Stanley have already lowered their GDP growth forecasts for the U.S. to 1.7% and 1.5%, respectively. Meanwhile, a Reuters poll found that 95% of economists in Canada, Mexico, and the United States believe Trump’s tariffs have significantly increased recession risks in their respective countries.
A “Golden Age” or Economic Disaster?
Trump supporters once believed they were voting for a new economic boom, but the reality may be far different. With recession fears mounting and investor confidence faltering, the U.S. economy could be on the brink of one of the worst collapses in its history. The coming months will be critical in determining whether the country can avoid a financial disaster—or if Trump’s policies will push it over the edge.
