JP Morgan raises probability of US economy falling into recession by year-end to 35 per cent

J.P. Morgan now puts the probability of the U.S. economy falling into recession by the end of the year at 35%, up from 25% earlier last month.J.P. Morgan economists, led by Bruce Kasman, wrote in a report to clients on Wednesday that news from the U.S. "suggests that the weakening in demand for labour has been more dramatic than expected, with the first signs of job cuts emerging. " The team left the likelihood of the economy falling into recession by the second half of 2025 at 45 per cent. "Our moderate upward revision to our assessment of recession risk compares with a larger adjustment to our assessment of the interest rate outlook," Kasman and his colleagues wrote. JPMorgan now sees only a 30 per cent chance that the Fed and other central banks will keep rates high over the long term, after predicting a 50 per cent chance just two months ago. With U.S. inflationary pressures falling, JPMorgan expects the Fed to cut rates by 50 basis points in September and 50 basis points in November.