JPMorgan lowers recession forecast after Trump’s tariff truce with China

JPMorgan was his forecast that the possibility of the US economy was joined by the President this year Donald Trump The tariffs for the transaction, temporarily reduced the tariffs, which he imposed on goods imported from China.

The President stated on Monday that the deal reached the “mutual” tariffs, “he will reduce the total tariff of Chinese goods in 90 days, and the negotiators are working on a longer-term agreement. The Chinese government, in turn, reduced its tariffs for its US goods within 90 days, from 125% to 20%.

“The last collection of the administration from China’s sharp tariffs on China must reduce the risk that the US economy slips this year,” said JPMorgan CEO Mikael Ferriol. “It is conditioned by current rates dominated indefinitely, the real GDP growth of this year we project 0.6% (4Q / 4Q) until the latest tariff news.

“We believe that the risks of the decline are still being added, but now below 50%,” Feroli said. The company’s preliminary forecast is set risk This year, after the announcement of the “mutual” tariffs of the Trump administration, it is 60%.

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JPMorgan lowed the likelihood of a decline in less than 50%, higher tariffs, higher tariffs in the previous month. (Mark Felix / Bloomberg Getty Images / Getty Images)

JPMorgan analysis predicted that personal consumption costs (PCE) index – preferred Federal Reserve Inflation measuring – At the end of this year there will be 3.5%, less than 4% before the tariff pause, but more than 2.2% higher than the beginning of the previous year.

The author’s reading of 3.5% will be good at the top FED inflation target By 2%, making it more likely that the Fed will delay interest rates unless the labor market starts worsening. The unemployment rate in April was 4.2%, and JPMorgan Projects will kill the unemployment rate by 4.8% in the second quarter of 2026.

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Tariffs are taxes on imported goods that pay importers, which usually transfer higher costs to consumers at higher prices. (Qian Weizhong / VCG Via Getty Images / Getty Images)

“We are still modestly contributing to this year’s work this year, as the demand for work is predicted to slow down more than the labor force,” Feroli wrote. “Our updated laboratory Outlook requires less to take action risks immediately. For FED, we are pushing back to the exchange rate cut from September to December. “

He added that after December, the Bank sees three further sequence reduction, which reduce the target range through the second quarter of 2026.

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Chinese President Xi Jinping, Right, Right and President Donald Trump stopped higher tariffs for 90 days, and negotiations continue. (Xinhua / Ju Peng Via Getty Images / Getty Images)

The report indicates that the changes Tariffs on Chinese products The average effective rate has been reduced by about 24% to 14%, although it remains well from 2.3% efficiently dominated by 2.3% dominated in 2024.

“A The tariff is a taxAnd so, compared to preliminary assumptions, it can be considered a tax reduction of almost $ 300 billion, “Feroli wrote.

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“This tax rolling should provide some assistance to consumers’ expenses, and in our modeling the prospect of the second half of the second increase in modern growth,” he added.