Is recession all set to hit US economy? Here's what Americans think

There is a much higher risk of stagflation than recession in the U.S. economy over the next year, while the asset class most expected to outperform in 2025 is cash, according to the results of a JPMorgan survey published on Friday.
The trade war started by the U.S. administration of Donald Trump is seen by the majority as the policy with the most negative impact on the world's largest economy.

Three in five respondents believe U.S. economic growth will stall and inflation will remain above the 2 per cent Federal Reserve target, with one-in-five respondents expecting inflation above 3.5 per cent.


There is also consensus on the weakness of the U.S. dollar, with a majority expecting the euro at or above $1.11 to end the year, at least an 8 per cent decrease for the U.S. currency this year.

"Our meetings were noteworthy for the differences in views between US investors compared to global investors on the consequences and market implications" of the regime change in the United States, JPMorgan said.

Cash is expected to remain expensive as yields on the U.S. 10-year note are not seen declining much from current levels. Over half of respondents believe the benchmark yield will be at or above 4.25 per cent by the end of 2025.

Almost half of the respondents expect Brent oil prices to stabilize not far from the current price of $66 per barrel, while 3 in 10 foresee prices dropping to or below $60.

At 13 per cent, more investors bet that emerging market equities will outperform other asset classes than the 9 per cent who think developed stocks will. Fifty-seven percent of respondents expecting Wall Street stocks to be the asset class with the largest outflows this year.

ESG investing was out of favor with 30 per cent committed to maintaining their strategies while 42 per cent showed no interest. JPMorgan's survey was conducted on April 1-24 and 495 investors responded, according to the bank.

FAQs

Q1. What do Americans think?
A1. There is also consensus on the weakness of the U.S. dollar, with a majority expecting the euro at or above $1.11 to end the year, at least an 8 per cent decrease for the U.S. currency this year.

Q2. What do Americans think about emerging market equities?
A2. At 13 per cent, more investors bet that emerging market equities will outperform other asset classes than the 9 per cent who think developed stocks will. Fifty-seven percent of respondents expecting Wall Street stocks to be the asset class with the largest outflows this year.