JPMorgan sounds global recession alarm
JPMorgan has raised the probability of a global recession to 60% in the wake of US President Donald Trump’s announcement of sweeping new tariffs, which have unsettled financial markets and heightened concerns about a global trade war.
“The risk of recession in the global economy this year is raised to 60%, up from 40%,” JPMorgan chief economist Bruce Kasman wrote in a note to clients titled “There will be blood,” as quoted by Bloomberg.
Kasman also called the tariffs the largest tax hike on US households and businesses since 1968 and warned that the consequences could be far-reaching. “The effect of this tax hike is likely to be magnified – through retaliation, a slide in US business sentiment, and supply chain disruptions,” he added.
The US dollar index plunged 2.16% in premarket trading on Thursday, falling to its lowest level since October. The declines come in the wake of Trump’s decision to impose the tariffs, ranging from 10% to 50%, on a broad range of imports from dozens of countries. Heightening fears of a global trade war have reportedly spurred investors to seek safe-haven assets.
Goldman Sachs has also revised its outlook, increasing the probability of a US recession in 2025 from 20% to 35%, citing new US policies.
Earlier this week, Deutsche Bank warned of a potential dollar crisis due to the coming tariffs.
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For those fools who say Musk is running the government, this proves otherwise. On the other hand, if you have a rocket scientist in the government, you had better use his advice. What has Navarro done to make the world a better place?
Elon Musk rips ‘moron’ Trump trade adviser Peter Navarro: ‘Dumber than a sack of bricks’
Billionaire Elon Musk escalated his attacks against White House trade adviser Peter Navarro on Tuesday, calling him a “moron” who’s “dumber than a sack of bricks.”
Musk, 53, responded Tuesday to the trade adviser’s suggestion on CNBC’s “Squawk Box” Monday that the Tesla boss was “not a car manufacturer” but “a car assembler,” pointing to the electric vehicle company’s importing of batteries and other key components to manufacture its cars.
“Navarro is truly a moron. What he says here is demonstrably false,” Musk wrote on X, adding in a subsequent post: “Tesla has the most American-made cars. Navarro is dumber than a sack of bricks.”
“By any definition whatsoever, Tesla is the most vertically integrated auto manufacturer in America with the highest percentage of US content.” Musk continued. “Navarro should ask the fake expert he invented, Ron Vara.”
In his screed against Navarro, Musk cited a Cars.com study of 338 cars in 2023 that concluded Tesla had four of the top five American-made cars. However, that study counted Canada as part of the US.
Over the weekend, Musk had first taken swipes against Navarro, 75, seemingly irked by President Trump’s onslaught of tariffs last week that Navarro played a pivotal role in crafting.
Musk had chided Saturday that Navarro’s Harvard education — he holds a master’s and Ph.D. from the Ivy League university — “is a bad thing, not a good thing,” prompting the trade adviser to accuse the world’s richest man of trying to protect his own interest.
“Elon, when he’s in his DOGE lane, is great, but we understand what’s going on here. Elon sells cars. He’s simply protecting his own interests,” Navarro told Fox News Channel’s “Sunday Morning Futures.”
US stocks jump as trading partners rush to negotiate with Trump on tariffs
“There’s no rift here. Look, Elon, he’s got X, he’s got a big microphone. We don’t mind him saying whatever he wants. But, just, the American people need to understand that we understand what that’s all about, and it’s fine,” Navarro added.
Do you not think, Mr Navarro, that what is true of Tesla is also true of thousands of American industries?
Last week, Trump, 78, announced the highest rate of tariffs on foreign countries in nearly a century, including a 10% baseline rate on virtually every country that took effect at 12:01 a.m. Saturday and higher, customized rates that will take effect after midnight Wednesday.
Musk has refrained from criticizing Trump directly, but his dissatisfaction with the tariffs has been apparent. On Monday, he reposted a video of libertarian economist Milton Friedman’s famous discussion about the making of a pencil.
The South Africa-born tycoon also publicly expressed hope that the end result of Trump’s protectionist shift will be a zero-tariff understanding between the US and Europe.
“At the end of the day, I hope it’s agreed that both Europe and the United States should move ideally, in my view, to a zero-tariff situation, effectively creating a free trade zone between Europe and North America,” Musk said during a video chat with Italy’s right-leaning co-ruling League party over the weekend.
“If people wish to work in Europe or wish to work in North America, they should be allowed to do so in my view,” Musk told League leader Matteo Salvini, adding that this “has certainly been my advice to the president.”
Trump's sweeping tariffs explained
- A new 10% baseline rate and harsher “reciprocal” levies will impact dozens of countries, including key allies such as European Union members, Japan and Israel.
- Online Chinese retailers, such as Temu and Shein, are no longer exempt from tariffs, due to the closing of a trade loophole on de minimus goods.
- A 25% tariff has been issued on foreign-made cars, which impacts roughly half of all vehicles sold in America.
- Following Trump’s “Liberation Day,” the Dow plunged more than 1,000 points over fears of an all-out trade war.
Last November, just before Trump’s electoral victory, Musk had publicly raised deep concerns about the use of tariffs to protect US industry.
“I think you need to be careful with tariffs,” Musk told podcast titan Joe Rogan at the time. “I deal a lot with supply chain issues. Like, the global automotive supply chain for Tesla is incredibly complex. So when there are sudden changes in tariffs … it messes everything up.”
“You want to have tariffs be predictable so that tariffs can adjust their supply chain,” he added. “I think companies are more than happy to increase manufacturing in America, it’s just that you can’t do it instantly.”
Exactly!
Musk has enjoyed profound influence in the second Trump administration, guiding the Department of Government Efficiency (DOGE) cost-cutting crusade.
When asked about the growing feud between Musk and Navarro, White House press secretary Karoline Leavitt brushed it off.
“Whatever. We are the most transparent administration in history, expressing our disagreements in public,” she told a CNBC reporter.
I just wish it didn't sound like a group of adolescent boys in a back alley.
As the stark market has nosedived amid the onslaught of tariffs, Musk’s personal net worth has also sunk nearly $50 billion over the past two weeks, according to data from Bloomberg’s Billionaire Index.
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