JPMorgan's Warning: The 'Goldilocks' Economy is Over | The Briefings

Added: 2026-05-30

[00:00:00]Welcome everyone. Hope you are doing well. It's Friday, May 29th. Often, we talk about the economy and what might we be facing in the very near future. It wasn't too long ago that we would be considering stagflation.

[00:00:17]Well, JP Morgan has just weighed in and they're stating Goldilocks is leaving the building and they're now predicting negative growth shock. So, here's the report.

[00:00:30]JP Morgan says the Iran war has soured the economic outlook.

[00:00:37]The bank says it's anticipating a negative economic growth shock due to sticky inflation.

[00:00:46]Another concern is higher energy prices could hurt consumer spending and weigh on the job market, JP Morgan's economist said.

[00:00:56]Economists at JP Morgan said they've officially taken a Goldilocks scenario off the table.

[00:01:06]So, the Goldilocks scenario is the perfect scenario for the market.

[00:01:11]Inflation is cooling and the economy continues to grow.

[00:01:16]But, that's the Goldilocks scenario which they have taken off the table. The bank says to blame the Iran war with the latest surge in inflation likely to spark a negative growth shock.

[00:01:33]In the note to clients on Friday, JP Morgan economists said they believe higher energy prices could push core inflation past 3% which was the bank's long-standing forecast for global core inflation at the start of the year.

[00:01:54]So, because of yesterday's report, we now know that core inflation hit an annual rate of 3.3% so higher than JP Morgan economists has expected.

[00:02:09]Rising transportation and input costs stemming from higher oil prices could also help push core goods inflation past 2% above the Fed's long-running price target they estimated.

[00:02:26]The bank trimmed its global economic growth forecast by around a quarter of a percentage point.

[00:02:33]It pointed to the possible knock-on effects of higher prices such as higher interest rates, subdued consumer spending and consequent weakness in the job market.

[00:02:48]Risks are elevated that an energy price shock squeezes household purchasing power and depresses business sentiment raising the specter of a negative growth shock raising unemployment rates.

[00:03:05]That's what the team said at JP Morgan.

[00:03:10]So, thank you for joining me for Friday's brief. I appreciate you spending time with me here. Hey, don't forget to subscribe to the channel if you haven't subscribed and let me know where you're listening or watching from.

[00:03:23]Until next time, see you then.