JPMorgan Raises Recession Risk To 60% As 'Largest US Tax Hike' In 60 Years Hits Global Economy

Wall Street just got a wake-up call. According to JPMorgan analyst Maia G. Crook, the probability of a U.S. recession has surged to 60%, up from 40% last month, thanks to the latest round of tariff hikes.

The "largest U.S. tax hike in nearly 60 years" is expected to hit household and business spending, drag down sentiment and disrupt global supply chains.

Tariffs & Tumbling Sentiment

The tariff war escalated with a fresh 22% hike, pushing fears of retaliation and economic slowdowns to new highs. Crook warns of ripple effects, noting that the uncertainty around trade policies could further dampen business confidence.

While there's still a 40% chance of avoiding a recession, she cautions that it hinges on "negotiations” that “will bring these announced rates down in the coming weeks."

Markets On Edge: Where To Look Next?

With recession risk on the rise, broad market exchange-traded funds (ETFs) like SPDR S&P 500 ETF Trust SPY, the iShares Core S&P 500 ETF IVV and the Vanguard S&P 500 ETF VOO are under scrutiny.

Investors may look to defensive plays like utilities and consumer staples ETFs, such as the Utilities Select Sector SPDR Fund XLU or Consumer Staples Select Sector SPDR Fund XLP as safe havens.

Will The Fed Step In?

Despite the ominous outlook, Crook sees a path to resilience if global negotiations ease tensions. However, she warns that the administration's approach to tariff calculations "raises questions around the basis for negotiations going forward."

With economic uncertainty mounting, investors may need to brace for volatility ahead.

For now, markets are on edge and recession risk is no longer a distant possibility – it's a very real threat.

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