05.04.2025 16:53
The American bank JP Morgan has outlined the expected risks in the markets. The phrase "Blood will flow," used by the bank to describe the potential depth of an economic crisis, has raised concerns.
JP Morgan, one of the leading institutions in the financial world, wrote that the additional customs decision of the USA will almost lead to disaster. It noted that these decisions have raised the probability of a recession in the American economy to 60%.
"THERE WILL BE BLOOD"
In a note titled "There will be blood," the bank's team reported that the recent tariff increases are the largest tax hike since 1968.
"The impact of this tax increase is likely to create a negative effect on confidence in the economy among US business circles and to increase through supply chain disruptions. The soothing effect of looser fiscal policies resulting from tax increases will only be modest. We view the full implementation of the announced tariffs as a significant macroeconomic shock that is not currently included in our forecasts. Therefore, the continuation of these policies could push the US and possibly the global economy into recession this year."
"COSTS MAY INCREASE PERMANENTLY"
JP Morgan's research note highlighted the warning that "Although the downturn in the US and global economy may be mild, recessions are inherently unpredictable." The bank's economists commented that "Restrictive trade policies that could last a long time and the restriction of immigration to the US may bring about permanent supply costs that will reduce US growth in the long run." Researchers predict that the US tariff increase will reduce US GDP by about 2% and global GDP by 1 percentage point due to retaliatory measures from China and Europe.