JPMorgan survey shows consensus over weak dollar, US stagflation

There is a much higher risk of stagflation than recession in the U.S. economy over the next year, while the asset class most expected to outperform in 2025 is cash, according to the results of a JPMorgan survey published on Friday.

The trade war started by the U.S. administration of Donald Trump is seen by the majority as the policy with the most negative impact on the world’s largest economy.

Three in five respondents believe U.S. economic growth will stall and inflation will remain above the 2% Federal Reserve target, with one-in-five respondents expecting inflation above 3.5%.

There is also consensus on the weakness of the U.S. dollar, with a majority expecting the euro at or above $1.11 to end the year, at least an 8% decrease for the U.S. currency this year.

“Our meetings were noteworthy for the differences in views between US investors compared to global investors on the consequences and market implications” of the regime change in the United States, JPMorgan said.

Cash is expected to remain expensive as yields on the U.S. 10-year note are not seen declining much from current levels. Over half of respondents believe the benchmark yield will be at or above 4.25% by the end of 2025.

Almost half of the respondents expect Brent oil prices to stabilize not far from the current price of $66 per barrel, while 3 in 10 foresee prices dropping to or below $60.

At 13%, more investors bet that emerging market equities will outperform other asset classes than the 9% who think developed stocks will.

Fifty-seven percent of respondents expecting Wall Street stocks to be the asset class with the largest outflows this year.

ESG investing was out of favor with 30% committed to maintaining their strategies while 42% showed no interest.

JPMorgan’s survey was conducted on April 1-24 and 495 investors responded, according to the bank.

China’s top market regulator said on Sunday it was paying close attention to CK Hutchison’s planned sale of most of its ports operations to a BlackRock-led consortium and parties to the deal should not try to avoid an antitrust review.

The sale by the Hong Kong conglomerate, which contains two ports along the strategically important Panama Canal, has become highly politicised amid intensifying U.S.-Sino trade tensions.

“No concentration of undertakings shall be implemented without approval, otherwise legal liability will be incurred,” the State Administration for Market Regulation said in a statement.

The statement was in response to a Wall Street Journal article on April 16. The MSC shipping empire, which is part of the BlackRock consortium, has held discussions on moving ahead with the bulk of the deal while disputes over the two Panama ports are resolved, the report said, citing people familiar with the matter.

The deal has two components with different ownership structures - one for the Panama ports and one for everything else, the report added.

U.S. President Donald Trump has repeatedly said he wants to take back the Panama Canal and has hailed the deal as a “reclaiming” of the waterway. Chinese state media, however, have criticised the planned sale as a betrayal of China’s interests.

Trump said on Saturday that American military and commercial ships should be allowed to travel through the Panama Canal and Suez Canal free of charge.

Tycoon Li Ka-shing’s CK Hutchison announced last month it would sell its 80% holding in the ports business which encompasses 43 ports in 23 countries. The business has an enterprise value, which includes debt, of $22.8 billion.

Singapore’s PSA International, which owns the other 20%, is also exploring a sale of its holding, sources have said.

Overall the Hong Kong conglomerate has interests in 53 ports. Ports in Hong Kong and mainland China were not included in the deal.