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JPMorgan Issues ‘High Alert’ Warning as Trade Tensions Risk Global Collapse
#Markets #RecessionWarning #EconomicOutlook
JPMorgan has sounded a major alarm: escalating tariffs and trade tensions could be a “self-inflicted wound” that sends the U.S. spiraling into recession—with ripple effects across the globe.
According to a top executive at the firm, if the current tariffs stay in place, they could boost inflation by 1–2% and simultaneously choke economic growth. The result? A toxic combo of rising prices, falling earnings, shaken investor trust—and potentially a global crash.
“If the announced U.S. tariffs persist and no further retaliatory escalation occurs, concern over slow growth and high inflation could evolve into something worse — a race toward recession,” the executive warned.
He advised investors to watch the 10-year Treasury yield closely—if it drops, that’s a clear sign the market is bracing for a downturn. He also took aim at overly bullish corporate earnings forecasts, predicting they’ll soon be revised downward.
“This year’s 10% earnings growth? Expect it to be slashed. Same with next year.”
In a sharp critique of the U.S. trade stance, he compared current policy to a bad opening move in a negotiation, calling it an example of poor anchoring:
“It’s like ‘Negotiation 101.’ Start with a bold move—but when it’s absurdly high, trust collapses. Right now, nobody’s happy with the announced tariffs… except the President.”
On the Fed's next move? Don’t expect four rate cuts, he said:
“That seems unlikely. I’m leaning toward one cut in the second half. If growth nosedives, maybe two. Time will tell.”
With consumer spending slowing, corporate hiring under pressure, and markets still priced high, the warning ends with a clear takeaway:
“Tail risks are elevated. Markets are not cheap. The outlook is uncertain.”
Want more updates like this? Stay tuned—big shifts are coming.