Investment bank JP Morgan has issued a warning that escalating trade tensions, especially between the US and China, could push the US economy towards a recession. Richard Medigan, the bank’s chief investment officer, stated in a note titled ‘Heightened Anxiety’ that imposing new tariffs could raise inflation by 1 to 2 percent and decrease economic growth by the same amount. He described the current situation as ‘self-inflicted pain’ and cautioned against the diminishing credibility of US trade policies. Medigan also predicted that profit growth expectations for companies are overly optimistic and a decrease in profits in the near future is likely. He added that the decrease in the yield of 10-year Treasury bonds could be a sign of market concerns about a recession.
