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Mon, March 3, 2025

The economy's at risk of plunging into an air pocket, says JPMorgan. What that would mean for stocks now and in the future.


Published on 2025-03-03 07:01:04 - MarketWatch
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  • Investors are brushing aside the possibilities of more turbulence to come for the U.S. economy and potential fallout for markets, warns JPMorgan.

JPMorgan Chase has warned that the U.S. economy might soon enter an "air pocket," a period of economic stagnation or contraction, due to several converging factors including the depletion of consumer savings, the resumption of student loan payments, and the potential for a government shutdown. This scenario could lead to a significant slowdown in economic activity, potentially pushing the economy into a recession. According to JPMorgan's analysis, this air pocket could result in a sharp decline in stock prices in the near term, with the S&P 500 possibly dropping to around 4,200 by the end of the year. However, the bank also suggests that this downturn might be followed by a recovery, as lower stock valuations could attract investors back into the market, setting the stage for future growth. The firm advises investors to prepare for increased volatility and to consider the timing of their investments carefully.

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[ https://www.marketwatch.com/story/the-economys-at-risk-of-plunging-into-an-air-pocket-says-jpmorgan-what-that-would-mean-for-stocks-now-and-in-the-future-e99b039a ]