Main Takeaways:-
- President Trump’s new reciprocal tariffs are predicted to cause a U.S. recession by the end of 2025, with rising inflation and more job losses.
- Global markets involving equities and crypto are facing substantial fluctuation and decline.
- Analysts advise investors to think about safe investments like gold and bitcoin because of the expected economic instability.
JPMorgan warned that a recession could be possible by the end of 2025; due to this warning, the U.S. economy is experiencing a tough time. The main cause? President Trump’s aggressive new tariffs. These tariffs are aimed at fixing trade imbalances by targeting countries that have a big trade surplus with the U.S., like India. More tariff increases are expected on the way.
JPMorgan predicts that the US economy will decline in 2025. Michael Feroli, the bank’s chief US economist, warned that the pressure from these new tariffs could lead to a recession, and unemployment might increase to 5.3%.
Fed Chair Warns of Risks to Growth and Inflation
Federal Reserve Chairman Jerome Powell also said that he is worried that the tariffs could affect the economy more than we expected. He warned that higher tariffs would probably cause inflation to rise and slow down economic growth.
JPMorgan predicts that inflation will rise to 4.4% by the end of the year, up from 2.8% in February. The bank thinks the Federal Reserve will begin lowering interest rates in June and will keep doing so slowly until January 2026, bringing the rates down to 2.75%-3%. However, Powell has recommended being careful and said there’s no need to rush, even with the increasing pressure.
Global Impact: Trade War Increases
At present the global economy is experiencing the pressure of America’s trade war. China has already reacted by adding a 34% tax on US goods, and other countries are either warning to respond or getting ready for difficult talks.
China’s action caused a big drop in the markets, leading to a large sell-off. Trump’s trade war has already caused more than $5 trillion in losses for the US stock market. And JPMorgan is not the only one warning—Barclays expects a slowdown next year, Citi predicts only 0.1% growth, and UBS has lowered its forecast to 0.4%.
Mark Carney, the Canadian Prime Minister, blamed the US for getting back from its global leadership role.
A Hit In the Crypto Market
After Trump’s tariff announcement, the crypto market dropped suddenly, and investors are thinking of investing in gold as a safer option. Bitcoin briefly reached $88,500 but then dropped below important support levels. Popular altcoins like XRP, Solana, and Dogecoin lost up to 4.5% of their value. Crypto-related stocks in the US also declined because of new tariff policies.
Fear, uncertainty and doubt (FUD) are increasing in the crypto market. Since February 1, Bitcoin has fallen by 10%, and Ethereum is down by 20%, as concerns about how tariffs might affect the growth and use of blockchain technology keep increasing.
On the other hand, XRP has performed well, rising by 2% after the SEC officially dropped its case against Ripple. This has given investors some relief and brought an end to years of legal uncertainty.
Will Bitcoin Stand the Test?
The market is divided on how Bitcoin will handle this situation. Some think of it as “digital gold,” a way to protect against inflation and economic instability. If the Federal Reserve lowers interest rates, Bitcoin might do better because there will be more money available. With more financial risks, many investors might choose Bitcoin as a safe place to store value.
Read also:- TON Technical Analysis – Is Toncoin ($TON) Primed for a Bullish Reversal?
Disclaimer: We at Bitcoinik.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice, and viewers should consult their financial advisors before investing.
