On Wednesday, Jamie Damon, the CEO of JPMorgan Chase, widely recognized as the "Wall Street guru," stated that he believes the probability of a "soft landing" for the US economy is around 35% to 40%, so the most likely scenario is still an economic recession.
In February of this year, Damon stated that the market was overly optimistic about the risk of the United States avoiding an economic recession. The market believes that the likelihood of a soft landing is 70% to 80%, while I think the likelihood is only half of this expectation, "he said at the time.
When asked in an interview on Wednesday whether this view has changed now, Damon said that the probability of a soft landing for the US economy is "roughly the same" as his expectations in February.
However, Damon also stated that although the default rate of credit card borrowers is on the rise, the United States has not yet entered a recession. In fact, Damon has been warning of an economic "hurricane" since 2022, but the performance of the US economy has exceeded his expectations.
Regarding the inflation outlook, Damon stated that he has some doubts about whether the Federal Reserve can lower the inflation rate to its target of 2% due to future spending on green economy and military.
There is a lot of uncertainty, "Damon said. I have always pointed out that geopolitics, housing, deficits, spending, quantitative tightening, elections, all of these can cause some panic in the market
Damon also said that the Federal Reserve may soon cut interest rates, but "I don't think it's as important as others think
On the same day that Damon made the above comments, economists at JPMorgan, led by Bruce Kasman, predicted in a report to clients that the likelihood of the US economy falling into a recession by the end of this year was 35%, higher than the 25% predicted at the beginning of last month. The team maintains a 45% probability of the US economy falling into recession by the second half of 2025.
Concerns about an economic recession have led to a sharp decline in the US stock market in recent days, with the S&P 500 index falling 3% on Monday, the largest drop in nearly two years.
However, some other economists are more optimistic than Damon, believing that a soft landing is more likely to occur compared to an economic recession.
Moody's Chief Economist Mark Zandi recently stated, "I believe the most likely scenario is a soft landing: an economic recession can be avoided
Jay Bryson, Chief Economist for Economics at Wells Fargo, also stated that a soft landing remains his' baseline forecast '.