JPMorgan expected a recession to be ante portas but evidently changes its outlook into a more optimistic one. Bad news has evaporated from markets at the time being. Bloomberg today reported on a JPMorgan report. Many global measures of assets are pricing in slower economic growth than the current pace, the report said, including on risk premiums. But, according to the report, we don’t necessarily have to expect a recession in 2020:
“If the Fed is less spooked by full employment, more tolerant of an inflation overshoot and less anxious to reach restrictive policy, then 2020 might not be a year to think about recession and so late 2019/early 2020 would be premature to position defensively cross-asset,” John Normand wrote in a note dated Feb. 1.
The U.S. Fed signaled last week that may not see raising rates any time soon. The Fed’s attitude has already been welcomed by equity investors who boosted the S&P 500 2.5 percent over three sessions.