Banking giant JPMorgan Chase is reportedly giving a 60% chance that a global recession will occur this year due to “disruptive” policies in the US.

According to a new report by Reuters, JPMorgan is raising the odds of a global recession from 40% to 60% due to new US trade policies, which include tariffs on China and the European Union (EU), sparking a worldwide trade war.

As stated by the firm in a note seen by Reuters,

“Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year. The effect… is likely to be magnified through (tariff) retaliation, a slide in U.S. business sentiment and supply-chain disruptions.”

However, JPMorgan did note that it expects the blow from the tariffs to be dampened by the likelihood of interest rate cuts by the Federal Reserve in the future.

Other large institutions are sounding the alarm on a potential recession as well, including Goldman Sachs and the Hong Kong and Shanghai Banking Corporation (HSBC), though their odds of a downturn are lower.

As stated by an HSBC analyst, according to Reuters,

“Our equity market implied recession probability indicator suggests equities are already pricing in (about) 40% chance of a recession by the end of the year.”

Last week, Goldman Sachs raised its chances of a recession hitting the US economy in the next 12 months to 35%, a 15% jump from its previous prediction. The firm said that it expects inflation – excluding food and energy prices – to hit 3.5% this year, 1.5% higher than the Fed’s 2% goal.

Also last week, President Donald Trump signed an executive order imposing a 10% tariff on all imported goods entering the US, while issuing a proclamation detailing “reciprocal tariffs” on dozens of specific countries effective April 9th, with rates totaling up to 54% on China.

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