Analysts at JP Morgan have predicted an 85 percent chance that the United States will enter a period of recession based on the decline in the S&P 500.
During the past 11 recessions, the S&P 500 declined by an average of 26 percent. In the current year, the index has fallen 20 percent from its record high till now. “In all, there appear to be heightened concerns over recession risk among market participants and economic agents, which could become self-fulfilling if they persist prompting them to change behavior, e.g. by cutting investment or spending,” the strategists wrote in a note, Bloomberg reported. “Market concerns of a risk of policy error and subsequent reversal have increased.”
