JPMorgan has raised the probability of the U.S. economy entering a recession by the end of the year to 35%

ChainCatcher news, JPMorgan now believes that the probability of the U.S. economy entering a recession by the end of this year is 35%, up from 25% at the beginning of last month.

Economists at JPMorgan, led by Bruce Kasman, wrote in a report to clients on Wednesday that U.S. data "suggests that labor demand is weakening more sharply than expected, with early signs of layoffs emerging." The team maintains a 45% probability of a recession occurring by the second half of 2025.

Kasman and his colleagues wrote, "We have moderately raised our assessment of recession risks, while the adjustment to our interest rate outlook is more significant."

JPMorgan now believes that the likelihood of the Federal Reserve and other central banks keeping interest rates high for an extended period is only 30%, down from a predicted 50% two months ago. As inflation pressures in the U.S. decline, JPMorgan expects the Federal Reserve to cut rates by 50 basis points in September and November.