JPMorgan Chase & Co.’s chief of global markets strategy said the US could dodge a recession as the probability of that scenario has decreased following better clarity over global trade.
Dubravko Lakos-Bujas said Thursday in a Bloomberg Television interview that he sees the chance of a recession at 35%, clarifying that it was his own view though JPMorgan’s official assessment earlier this week was for “still elevated” risks but pegged below 50%.
“There’s definitely more clarity than a few weeks ago,” he told Bloomberg Television’s Francine Lacqua on the sidelines of a global markets conference organized by the Wall Street giant in Paris. “Some of the uncertainty around trade, tariffs, policy started to get reined in.”
Economic forecasters this week have said that the Trump administration’s temporary trade deal with China didn’t arrive in time to prevent a slowdown in the world’s largest economy but it reduced the risk of a full-blown recession later this year. Billionaire Steve Cohen, founder of hedge fund Point72 Asset Management, said Wednesday that the risk stood at 45%, which Lakos-Bujas called “pretty high.”
“The detox period the US administration has been talking to a large extent is behind us,” Lakos-Bujas said. “I don’t think we are fully out of the woods yet but the focus is turning towards tax cuts, which has been high on the president’s agenda. Deregulation is there.”
JPMorgan’s chief US economist Michael Feroli said in a note on May 13 that the US economy will grow 0.6% in 2025, up from 0.2% previously, and a key measure of underlying inflation — based on the personal consumption expenditures price index excluding food and energy — rising to 3.5% instead of 4%.
JPMorgan’s view on the odds of a recession was echoed by Apollo Global Management Inc. President Jim Zelter in a separate Bloomberg Television interview later from New York on Thursday.
He described the Trump administration’s recent tariff pause and de-escalation with China as a “macro political pivot” that came after a key meeting with US retail executives who warned policymakers of the challenges their proposals were causing on the ground.
“The administration has certainly not admitted they’ve made a mistake but they have clearly pivoted,” Zelter said. “There is a big gap between confidence, sentiment and the results. Confidence and sentiment is still pretty negative, or concerned, but the results have been pretty strong.”
Rapid changes in US trade policy since President Donald Trump made his initial tariff announcement in early April have sent recession odds haywire, Zelter said.
“You would have been saying recession went from 30% to 70% or 80%, now it is probably below 50%,” he said.
Apollo is now weighing how consumers, corporates and countries recover from the recent volatility. While consumers look poised for a V-shaped recovery and corporates are showing signs of a U-shaped recovery, the global response to rapidly evolving US policy risks an L-shaped recovery, he added.
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