Will there be a recession in US? JPMorgan says 35% possibility by end of 2024

US recession: JPMorgan now sees just a 30% chance of the Federal Reserve keeping interest rates “high-for-long".

JPMorgan Chase now sees a 35% chance that the US economy will enter recession by the end of this year. This is up from 25% as of the start of last month. JPMorgan economists led by Bruce Kasman wrote in a note to clients that US news “hints at a sharper-than-expected weakening in labor demand and early signs of labor shedding." The team kept the odds of a recession by the second half of 2025 at 45%.

US recession: Shoppers in the Georgetown neighborhood of Washington, DC. (Bloomberg)

The note read, “This modest increase in our assessment of recession risk contrasts with a more substantial reassessment we are making to the interest rate outlook."

Realization of a “US/global recession” would “almost certainly produce a sharp and immediate easing” by central banks, JPMorgan economists wrote.

Will US Federal Reserve cut interest rates?

JPMorgan now sees just a 30% chance of the Federal Reserve keeping interest rates “high-for-long" compared with a 50-50 assessment two months back. JPMorgan said that as US inflation pressures are coming down, the Fed cutting rates by half a percentage point is possible in September and November.

The bank’s new calculation for recession risks follows a similar step by Goldman Sachs Group which now sees a 25% probability of a recession in the next year.