US Recession: J.P. Morgan has predicted that the United States economy will likely fall into a recession this year. J.P. Morgan said that this will be largely due to the impact of new tariffs announced by President Donald Trump.

In a note to investors released on Friday evening, the firm’s chief U.S. economist, Michael Feroli, said that the country’s gross domestic product (GDP) is expected to contract “under the weight of the tariffs.” According to a report by news website The Hill, Feroli added that the recession is also forecasted to “push the unemployment rate up to 5.3%.”

This gloomy outlook came shortly after President Trump announced, on April 2, the imposition of reciprocal tariffs on many countries. The move is part of his administration’s attempt to rebalance trade relationships with major U.S. trading partners.

US Recession: What Else?

Federal Reserve Chair Jerome Powell also expressed concern about the potential impact of these new tariffs. Speaking on Friday at a business journalism conference, Powell said the new tariffs would cause much greater damage and possible economic damage than previously expected. He noted that this development could make the Federal Reserve’s efforts to control inflation more difficult.

“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said.

According to President Trump’s tariff plan, a 10% tariff will be applied to imports from all countries starting April 5. Additionally, from April 9 onwards, countries with the largest trade deficits with the U.S. will face higher, individualised tariffs.

It is worth noting that India is one of the countries affected, with a 26% tariff imposed on all its exports.