JPMorgan analysts see ‘stagflationary’ slowdown in US economy this year due to tariffs

According to JPMorgan's forecasts, US GDP growth will be 1.3% in 2025. This is lower than the bank's estimates, published at the start of the year. As it was noted by the bank's experts, the economic development of the United States will come under pressure from Donald Trump's import tariffs. 

Analysts of the organization said that the “stagflationary impulse” from the increase in tariffs was the main reason for the downward revision of their forecast. Stagflation is defined as a combination of sluggish economic growth and persistently elevated inflation. The analysts also pointed to increasing risks of recession in the country.

Speaking of the US currency, JPMorgan maintains a bearish outlook on the dollar due to the slowdown in the country's economy. At the same time, central banks in other developed countries are implementing looser monetary policies that contribute to the growth of their economies.

Bank analysts expect the US Federal Reserve to reduce borrowing costs by 100 basis points between December and spring 2026. That's later than money market participants anticipate, who are projecting two 0.25% rate cuts this year. A recession or sharp slowdown in the US economic growth could trigger a more aggressive rate-cutting cycle, JPMorgan analysts said.