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.