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

JPMorgan now sees a 35 percent chance that the U.S. economy will fall into recession by the end of this year, up from 25 percent at the beginning of last month. JPMorgan economists led by Bruce Kasman wrote in a note to clients on Wednesday that the U.S. news "suggests that labor demand is weakening more sharply than expected, with early signs of layoffs emerging." The team maintained the probability of a recession by the second half of 2025 at 45 percent. "We have raised our assessment of recession risk modestly, compared to our assessment of the interest rate outlook by a larger margin," Kasman and his colleagues wrote. JPMorgan now sees a 30 percent chance that the Federal Reserve and other central banks will keep interest rates high for a long time, compared with a 50 percent chance it predicted just two months ago. With US inflation pressures falling, JPMorgan expects the Fed to cut rates by 50 basis points in September and November.