J. Bruce Kasman, Chief Economist of P. Morgan, recently stated that the US economy faces a 40% risk of recession, and if the government further weakens public trust in US governance, it could cause long-term damage to the US's position as an investment destination, particularly with regards to the impact on the US dollar.

Kasman said, "Currently, our attention to the US economy is very high." He mentioned in an interview with reporters in Singapore that although he has not adjusted any economic expectations, he has raised the risk of recession from 30% at the beginning of the year to 40%. J. P. Morgan's current forecast is that the US economy will grow by 2% this year.

The Nasdaq index has experienced its most intense sell-off in recent months, mainly due to investors' concerns about Trump's tariffs slowing down economic growth.

At the same time, the status of the US dollar is also under threat. If the Trump administration continues to push for tariff policies and other market unfriendly measures, investors' confidence in the US dollar may be affected, especially in global capital flows where the dollar's "privileged position" may be weakened.

According to market research, 95% of economists from Canada, Mexico, and the United States last week believed that due to Trump's tariff policies, the risk of recession facing their economies has increased. This change directly affects the stability of the US dollar, especially in the foreign exchange market where its attractiveness may gradually weaken.

In addition, economists also pointed out that institutions such as Goldman Sachs and Morgan Stanley lowered their US GDP growth forecasts last week, expecting US economic growth to be 1.7% and 1.5%, respectively.

This poses a threat to the role of the US dollar as a global reserve currency, especially as investors gradually lose confidence in the prospects of the US economy, and the US dollar may face depreciation pressure.

Kasman added, "If the Trump administration implements retaliatory tariffs significantly from April, the risk of recession could rise to over 50%." He also stated that if the United States continues to pursue unfriendly policies towards business, the risk of economic recession will further increase.

As market uncertainty about US policies increases, investors may begin to shift towards other assets, further weakening the global dominance of the US dollar.

Kasman pointed out that if the US government continues to implement measures such as cutting spending, changing global roles, and dissolving advisory committees, it may exacerbate global market uncertainty and affect the leadership position of the US dollar in the global financial system.

The uncertainty of these policies has increased the risk of US policies, and I believe this has been underestimated by the market, "he said.

Kasman emphasized in the end, "The long-standing 'privileged position' of the United States may be threatened. If the US financial deficit and debt financing costs rise, the attractiveness of capital flows and US dollar assets may also be affected

Editor's viewpoint:

The increasing risk of recession facing the US economy not only affects the stock market and overall economy, but may also exert long-term pressure on the global position of the US dollar.

The tariff policies implemented by the Trump administration and other measures that may increase economic uncertainty will affect the attractiveness of the US dollar as a global reserve currency.