JPMorgan Chase CEO: Trump's Tariff Policies Are Pushing the US Economy Toward Recession

On Wednesday local time, Jamie Dimon, CEO of JPMorgan Chase, stated that as Trump's tariff policies continue to disrupt the market, a US economic recession has become a very likely outcome.

Currently, the trade war is intensifying, with US stocks and bonds being heavily sold off, and concerns that tit-for-tat policies could lead to significant issues in the US financial markets and economy.

Dimon said in an interview that day: "I think a recession is probably a high-probability event because that's what the market is indicating. When the Dow Jones falls by 2,000 points, such a decline triggers a chain reaction, further exacerbating market panic. People see their 401(k) accounts losing money, your pension is losing money. You have to cut back on spending."

According to JPMorgan's market-based recession indicator dashboard, the Russell 2000 Index, which is dominated by small-cap stocks and has been hit hard in recent sell-offs, currently shows a 79% probability of a US economic recession.

JPMorgan economists expect the US GDP to shrink by 0.3% this year, a mild recession forecast, but following a year of strong economic growth.

Analysts pointed out that the last time the US saw an action like Trump's significant tariff hikes was in 1930. After then-President Herbert Hoover signed the Smoot-Hawley Tariff Act that year, global trade collapsed, and the trend towards global depression intensified.

After Trump announced tariff hikes and many countries took countermeasures, the sharp decline in the US stock market foreshadowed similar consequences. The reason is clear: Trump's tariffs are actually much higher than those enacted in 1930.

Dimon believes that markets are not always right, but most of the time they are. "I think they are right this time because they are just pricing uncertainty at the macro and micro levels, and then considering how it affects consumer confidence."

Dimon pointed out: "No one wants this to happen, but if it does, hopefully it won't last too long." Dimon added, "Resolving these tariff and trade issues would be a good thing."

It is worth noting that Trump quoted a statement from Dimon (resolving tariff and trade issues would be a good thing) in his latest social media post on Wednesday, but did not mention the recession. Trump also said: "Calm down! Everything will be fine. The US will be bigger and better than ever!"

Earlier on Wednesday, the 27 member states of the EU voted to impose a 25% tariff on US imports in retaliation for the Trump administration's announcement on March 12 to impose tariffs on EU steel and aluminum.

The Chinese government also quickly took firm countermeasures against the US government's unilateral bullying act of increasing tariffs on Chinese exports to the US from 34% to 84%, raising the tariff rate on all US-origin imports from 34% to 84%.

Dimon said he has seen a change in business confidence and expects many companies to cut back on spending. He claimed that JPMorgan Chase has also controlled its headcount, will not lay off employees immediately, but will not hire in large numbers either.