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JP Morgan (JPM, Financial) sees a strong economic future for 2025, with only a 15% chance of a recession in its first half. Strong U.S. growth, fueled by a resilient labor market, solid credit fundamentals, and investment in artificial intelligence, has helped the bank be optimistic.
Growth is projected to slow to 2.2% in 2025 from 2.7% in 2024. By region, U.S. GDP growth is seen moderating to 2.0% from a 2.4% annual pace, while China slumps next year to 3.2% from 4.8%. Global inflation is expected to soften with a decline in consumer price index (CPI) inflation to 2.7 percent from 3.0 percent, and the rates of disinflation will vary across regions.
The difference in monetary policy is expected, with the U.S. Federal Reserve targeting a drop of 100 basis points to 3.75% and the European Central Bank lowering rates below the neutral level of 1.75%. Currency challenges mean that rate normalization will be slower for emerging markets.
We see Indian, UAE, and Japanese equity as core investments, and U.S. cybersecurity and data center industries as high returns.” Euro area duration and Turkish government bonds are identified in the bonds. Gold long and oil short are commodity strategies.
