JPMorgan strategists have issued a warning that a “fog of uncertainty” will weigh on global markets for the remainder of 2025, citing geopolitical tensions, unclear rate policies, and ongoing tariff impacts as key risk factors.
Fabio Bassi, JPMorgan’s Head of Cross-Asset Strategy, stated that self-inflicted policy damage could push the U.S. economy closer to a recession in the second half of the year. Despite resilience in financial markets, the bank’s analysts remain cautious, highlighting tariff fatigue among investors and the potential for higher-than-expected import duties.
JPMorgan’s outlook suggests that real estate is among the most vulnerable sectors, with equity markets likely to experience volatility or stagnation in the coming months. The firm also remains bearish on the U.S. dollar, while predicting limited upside for gold despite its appeal as a geopolitical hedge.
The bank’s strategists believe that higher-for-longer interest rates and the persistent AI investment theme will continue to support risk assets in the near term. However, they warn that a U.S. recession could trigger a “pain trade” for investors, forcing the Federal Reserve to ease monetary policy more aggressively.
JPMorgan’s latest market note, titled “When Will the Fog of Uncertainty Lift?”, underscores the disconnect between low volatility levels and elevated economic policy uncertainty, reinforcing concerns about market resilience versus complacency.
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