The News
Two major investment banks this week raised their forecasts for the risk of an impending US recession.
JPMorgan now says there is a 35% chance of such a downturn by year-end, up 10 percentage points, days after Goldman Sachs said it forecast a 25% probability of a recession in the next 12 months, also a 10-percentage-point increase.
Their projections came following days of market turmoil which were largely driven by investors unwinding a popular trade that was rendered less profitable by monetary tightening in Japan, but which was also attributed to some extent to fears of a slowdown in the world’s biggest economy and the consequences such a downturn would have for the globe.
