Don’t panic. Know this first.
As concerns about the future of the U.S. economy continue to grow, many analysts are revising their predictions for a potential recession. JPMorgan Chase’s recession probability model, as reviewed by Bloomberg, now suggests a 31% chance of an economic downturn in the near future, up from just 17% in November. This shift comes as other economic indicators also point to increasing risks for the U.S. economy.
Much of the current economic uncertainty can be traced back to President Donald Trump’s aggressive trade policies, including tariffs on both domestic and foreign goods. These policies have caused market volatility, as businesses scramble to adapt to the changing global trade landscape. If the economy does face a significant downturn, the consequences could include higher unemployment rates and further financial strain on American households. Such a scenario could also affect public confidence in President Trump’s economic agenda.
Several key metrics are currently flashing warning signs. For example, the CBOE Volatility Index, which tracks market risk, has surged nearly 50% in just one month, indicating that investors are bracing for potential turbulence in the markets. The Conference Board’s Consumer Confidence Index also saw a notable drop of 7 points in February, marking the steepest decline since August 2021. More concerning, the Expectations Index, which tracks consumer outlook for the future, fell below the 80-point threshold that often signals the onset of a recession.
Oil prices, too, have fallen to their lowest levels since September, signaling weaker demand and adding to concerns about the broader economic outlook. On Polymarket, a cryptocurrency-based prediction platform, users have increased their bets on the likelihood of a recession, with chances now standing at 38%, up from 23% just last week.
Economists like Mohamed El-Erian, former CEO of PIMCO, have also adjusted their predictions, raising the likelihood of a recession to around 30%. Despite the uncertainty, President Trump remains confident in the economic recovery, telling Congress, “Tariffs are about making America rich again and making America great again. And it’s happening. There’ll be a little disturbance, but we’re okay with that. It won’t be much.”
As we await further economic data, including upcoming reports on unemployment and inflation, the nation remains on edge. The coming weeks will likely reveal whether these concerns about a downturn are justified or if America’s economy will remain resilient in the face of global challenges.