The report from one of the world’s largest financial consultancies gave its forecasts for the end of 2024. What will the impact be on rates?
JP Morgan Chase & Co. raised to 35% the chances of that the US economy I went into recession later this yearcompared to 25% at the beginning of July. According to the economists of this bank, the news “point to a more pronounced weakening of the demand for labour than expected and to the first signs of a reduction in employment”.
The bank’s new calculation for recession risks follows a similar step from Goldman Sachs Group Inc.which now sees a 25% chance of recession in the next year.
The employment data
Weekly jobless claims were lower than expectedwhich helped ease some recent concerns about the strength of the labor market.
Initial claims for unemployment benefits were 233,000 last week, down 17,000 from the previous week and below the Dow Jones estimate of 240,000, the Labor Department reported Thursday.
The 10-year Treasury note yield fell back below 4% after the jobless claims data, a level seen before the disappointing July jobs report sent markets reeling.
Recession and relaxation of monetary policy by central banks
A “US/global recession” would produce “almost certainly a sudden and immediate relaxation” by central banksJPMorgan economists also wrote.
The team kept the probability of a recession in the second half of 2025 at 45%.As reported Bloomberg.
With US inflationary pressures on the decline, JP Morgan sees the Fed cutting rates by half a percentage point in September and November.
Source: Ambito
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