Major financial firms on Wall Street have warned that the likelihood of an economic recession in the United States is increasing.
According to Bloomberg News on the 5th (local time), the recession probability in the economic analysis model of JP Morgan, the largest bank in the U.S., was 31% as of the 4th. This is nearly double compared to 17% on Nov. last year.
Other economic indicators are also warning of a recession. When looking strictly at the prices of five-year Government Bonds, major metal price indicators, and small-cap stock price indicators, the probability of an economic recession in the U.S. rises to 50%.
A similar analysis model from the major U.S. investment bank Goldman Sachs also indicated that the probability of an economic recession in the U.S. was 23%, a sharp increase from 14% in January.
Nikolaos Panigirtzoglou, a strategist at JP Morgan, noted, "In the context of weakened economic activity indicators in the U.S. over recent weeks, the implementation of tariffs on Canada, Mexico, and China increases the risk of greater harm to future business and consumer confidence," adding that "this ultimately raises the possibility of a recession in the U.S."
Christian Müller-Glißmann, head of asset allocation research at Goldman Sachs, said, "The most significant changes in the yield curve, which indicate the prospects of interest rate cuts by the Federal Reserve (Fed) and potential recession risks, have emerged," and added that "the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), which tends to spike during recessions, has also risen."