Making Sense

Uncertainty reigns: The market outlook at mid-year

25 snips
Jun 30, 2025
Fabio Bassi, Head of Cross-Asset Strategy at J.P. Morgan, and Jay Barry, Head of Global Rates Strategy, delve into the current economic landscape. They discuss the enduring uncertainties shaping the market, including trade tensions and fiscal policies. The impact of rising U.S. tariffs on global growth and inflation is analyzed, alongside the resilience of corporate markets. Additionally, they explore the outlook for emerging markets amid geopolitical risks and the stabilization of oil prices, highlighting investor opportunities and challenges for the second half of 2025.
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INSIGHT

U.S. Economic Resilience Amid Risks

  • The U.S. economy has shown resilience in early 2025 despite many uncertainties.
  • There is about a 40% chance of recession in the U.S. in the second half of 2025 due to tariffs and global tensions.
INSIGHT

Tariff Effects on Economy

  • Tariffs impact the economy by front-loading activity, acting as a tax, and depressing business sentiment.
  • The tariff cost is spread broadly, moderating the immediate impact on consumer prices and spending.
INSIGHT

End of U.S. Economic Exceptionalism?

  • U.S. economic 'exceptionalism' is likely fading, with tariffs and immigration losses hindering growth.
  • Reduced government size and support for investment will weigh on future economic performance.
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