• J.P. Morgan has increased the likelihood of a U.S. and global recession to 60%, up from 40%, following President Trump's announcement of new tariffs. The tariffs include a 10% baseline on all imports and higher duties on several countries, which are expected to disrupt supply chains and negatively impact business sentiment. The brokerage noted that these disruptive policies are now seen as the biggest risk to the global economic outlook, with other firms like Barclays and Deutsche Bank echoing similar concerns about the potential for recession if the tariffs remain in place.

• Despite the heightened recession risk, J.P. Morgan anticipates that the impact of the tariffs may be somewhat mitigated by expected interest rate cuts from the Federal Reserve. The firm forecasts two rate reductions of 25 basis points each in June and September, with investors speculating on a total of four cuts in 2025. This monetary easing could provide some relief to businesses affected by the tariffs, although the overall economic environment remains uncertain and challenging.