Subhechcha Ganguly 
JPMorgan Chase & Co. has issued a grim economic forecast, warning that the United States is headed toward a recession this year, largely due to the sweeping tariffs recently announced by former President Donald Trump.
In a note to investors released Friday evening, JPMorgan’s chief U.S. economist Michael Feroli projected a 0.3% contraction in GDP for 2025, a sharp downgrade from the previous forecast of 1.3% growth. He also warned that the national unemployment rate could rise to 5.3% as economic activity slows.
“We now expect real GDP to contract under the weight of the tariffs,” Feroli said, according to Bloomberg. The note followed Trump’s Wednesday announcement of broad new tariffs on U.S. trading partners, including India — a move that rattled financial markets and triggered a two-day sell-off, wiping out $5.4 trillion in market value from the S&P 500 index.
The forecast from JPMorgan aligns with revised projections from other major banks. Barclays Plc on Thursday said it expects a GDP contraction in 2025 “consistent with a recession.” On Friday, Citi lowered its growth forecast to just 0.1%, while UBS revised its estimate to 0.4%.
UBS chief U.S. economist Jonathan Pingle highlighted the expected impact on global trade, predicting a more than 20% drop in U.S. imports over the coming quarters — levels not seen since before 1986. “Imports as a share of GDP are set to fall significantly, which will create disruptions across multiple sectors,” he said.
Amid rising inflation and weakening growth, JPMorgan anticipates the Federal Reserve will respond with a series of rate cuts starting in June, eventually lowering the benchmark interest rate to a range of 2.75%–3% from the current 4.25%–4.5%. However, these rate cuts may come even as underlying inflation is projected to climb to 4.4% by year-end.
The warnings from Wall Street have added urgency to concerns that the tariff policy could do more harm than good, reversing post-pandemic recovery gains and destabilizing the broader global economic outlook.
