US recession risk rising

US recession probabilities revised upwards. While Wall Street banks are taking the blame for the market earthquake, they are also revising US recession probabilities upwards. Following Goldman Sachs, JPMorgan also shared the view that the probability of a US recession has increased. According to the bank’s economists, including Bruce Kasman, the probability of a US recession has increased from 25 percent to 35 percent. The economists said, “News from the US points to a sharper-than-expected weakening in labor demand and early signals of job loss.” Two months ago, JPMorgan, which saw a 50 percent probability of the Fed and similar central banks “maintaining high interest rates for an extended period” scenario, has reduced this probability to 30 percent. With the easing of inflation pressures, JPMorgan expects a half-percentage point rate cut in September and November. The bank’s expectation of a recession in the second half of 2025 is at 45 percent.