A recent JPMorgan survey reveals growing concerns over potential stagflation in the U.S. economy rather than a straightforward recession in the coming year. The survey, published this week, emphasizes that cash is anticipated to be the most promising asset class in 2025.
The majority of respondents pinpointed the ongoing trade war initiated by Donald Trump’s administration as the most detrimental policy affecting the U.S. economy. About 60% believe that economic growth will plateau while inflation stays above the Federal Reserve’s 2% target, with 20% expecting it to exceed 3.5%.
There is shared sentiment regarding the weakened state of the U.S. dollar, with most participants predicting the euro will be at or above $1.11 by the year’s end. This projection indicates at least an 8% decline in the value of the U.S. currency this year.
JPMorgan pointed out the stark differences in perspectives between U.S. investors and their global counterparts about the implications of the recent regime change in America. Investors expect that cash will remain costly, as yields on the U.S. 10-year note are not predicted to drop significantly.
Over 50% anticipate the benchmark yield to hold at or above 4.25% by the end of 2025. Regarding oil prices, nearly half of respondents forecast Brent crude will stabilize around its current price of $66 per barrel, while 30% expect it to fall to or below $60.
Additionally, 13% of investors believe emerging market equities will outperform developed stocks, which have just 9% support. Finally, the survey indicates a shift in investor attitudes towards ESG investing; only 30% intend to stick with their strategies, while 42% express disinterest.
The survey was conducted between April 1 and April 24, with 495 investors participating.