JPMorgan Warns Of Tariff-Driven "Stagflationary" Slowdown In The U.S.

U.S. trade policies under President Trump could slow global economic growth and rekindle inflation at home, potentially pushing the U.S. into a mild recession later this year, JPMorgan analysts warned, Davide Barbuscia reported for Reuters on June 25, 2025.

The downgrade is attributed to the “stagflationary impulse” of higher tariffs.

In its mid-year outlook, the bank revised its U.S. growth forecast to 1.3% for 2025, down from the 2% predicted at the start of the year. Analysts attributed the downgrade to the “stagflationary impulse” of higher tariffs, which they say are weighing on economic activity while adding to price pressures.

“We still view recession risks as elevated,” JPMorgan said, estimating a 40% chance of a downturn in the second half of the year. Stagflation—an undesirable combination of slow growth and high inflation—last plagued the U.S. economy in the 1970s.

The report also included a bearish view on the U.S. dollar, citing weaker domestic growth compared to more accommodative policies abroad. Additionally, demand for U.S. Treasuries from foreign investors, the Federal Reserve, and banks is expected to decline as America’s debt burden increases.