JPMorgan Now Expects A Global Depression In The Second Quarter

by Tyler Durden
ZeroHedge.com
Wed, 03/18/2020

Earlier we reported that in a report titled “the lamps are going out all across the economy”, JPMorgan’s chief US economist, Michael Feroli slashed his Q2 US GDP forecast to a staggering -14%, which he optimistically expects to form the bottom of a V-shaped recovery that then lifts the US economy by +8% and +4% in Q3 and Q4, respectively (at least until the next downward revision in his forecast).

We doubt the V-shaped recovery will take place, in fact if there is any “recovery” it will be L-shaped especially if medical experts are correct that the pandemic will take 12-18 months to full clear out. That said, the Q2 prediction alone is catastrophic, and if that slowdown persists the US is facing not only a recession, but probably a second Great Depression.

However, if JPM’s forecast revision for the US was catastrophic, than its latest global outlook is downright apocalyptic.

In a separate note by JPM’s Bruce Kasman, has also taken a flamethrower to his global economic forecasts, and the bank’s head of economic policy now anticipates Europe to implode an unprecedented 22%, the UK to crater by a depressionary and with the US plunging 14%, he sees the global economy ex China contracting by a whopping -13.7%. In short, JPM now expects no less than a global depression in the second quarter. This will follow a Q1 quarter in which China is expected to collapse by -40.8%, which however will somehow surge by 57.4% in the second quarter.

This is how Kasman lays out his latest forecast:

Last week we concluded that the COVID-19 shock would produce a global recession as nearly all of the world contracts over the three months between February and April. This week’s reports, which show a collapse in China’s activity in February and in survey readings for March elsewhere in the world, validate this view. There is no longer doubt that the longest global expansion on record will end this quarter. The key outlook issue now is gauging the depth and the duration of the 2020 recession.

The Rest…HERE

This entry was posted on Thursday, March 19th, 2020 at 1:09 am and is filed under Economics, God Help Us. You can follow any responses to this entry through the RSS 2.0 feed.