JPMorgan Chase maintained its forecast of a 60 percent chance of a recession despite President Donald Trump‘s announcement of a 90-day pause on most U.S. “reciprocal” tariffs.

That pause does not include China, however, which now faces a whopping 125 percent tariff that Trump imposed after Beijing retaliated earlier with an 84 percent tariff of its own on U.S. imports.

The Context

JPMorgan’s refusal to budge on its 60 percent recession call—which it first announced last week—comes after Wall Street skyrocketed in the wake of Trump’s tariff pause.

The uptick followed a week of intense turbulence in which the S&P 500 risked plunging into bear market territory and even the U.S. bond market started to feel the negative effects of the tariffs.

But economists and analysts warned that despite Wednesday’s rally, the market will likely continue experiencing volatility because of lingering uncertainty about Trump’s endgame with tariffs and whether the U.S.-China trade war will escalate.

What To Know

JPMorgan cited the “shocking” China tariffs in its updated forecast on the economy, which was obtained by Newsweek on Wednesday night.

The Wall Street giant said that the pause on Trump’s “draconian” reciprocal tariffs, which he first announced last week, “is a positive development, all else being equal.”

“However, not all else is equal,” the report said, adding that “more shocking is the increase in China tariffs to an astounding 125%.”

JPMorgan referenced the other parameters of Trump’s pause on “reciprocal” tariffs, like America’s imposition of 10 percent across-the-board tariffs instead of the country-specific reciprocal rates he announced last week, some of which were as high as 50 percent.

“A simple calculation of 10% on all countries except China at 125% gives an average US tariff rate of roughly 25%—a touch higher than the rate at the end of last week,” the report said.

“Combined with the ongoing policy chaos on trade and domestic fiscal matters, along with the still-large losses in equity markets and hit to confidence, it remains difficult to see the US avoiding recession,” economists at JPMorgan wrote. “At the same time, China is likely to be hit very hard—likely prompting a large policy response.”

In addition to the 10 percent baseline tariffs that countries will face, Trump also left in effect a slew of other previously instated tariffs, including those on sectoral imports like steel, aluminum and auto parts. Mexico and Canada will also still be subject to a 25 percent tariff on imports that aren’t covered by the United States-Mexico-Canada Agreement that Trump negotiated during his first term in the White House.

Shortly after the pause was announced, Goldman Sachs pulled its recession call and downgraded the risk to 45 percent.

Trump, meanwhile, acknowledged Wednesday afternoon that his tariff pause was influenced by the market’s turmoil, as well as JPMorgan chief executive Jamie Dimon’s contention that a recession was a “likely outcome” of Trump’s trade war.

Shortly before Trump announced that he would pump the brakes on tariffs, he went on Truth Social and urged Americans to “be cool” while suggesting that it was a “great time to buy” into the market.

What People Are Saying

Asked about when exactly Trump made the decision to pause tariffs, the White House told the Associated Press: “It is the responsibility of the President of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fearmongering.”

Cato Institute Vice President of General Economics Scott Lincicome told CNN: “Markets are relieved a bit, but I don’t know how you could possibly think the U.S. is a sound, safe and stable place to invest when the president is flipping tariffs on and off like a light switch and there could be more of these things in a mere 90 days. So a bit of a reprieve, but we’re definitely not out of the woods.”

Adam Crisafulli, founder of Vital Knowledge, told CNBC: “Given how depressed stock prices and sentiment had become, the 90-day pause is sparking a violent rebound, and delaying implementation certainly removes a giant overhang from the market. But tariffs are not going away. China’s tariff rate is now in triple-digit territory, and who knows what happens in 90 days when this pause concludes.”

What Happens Next

The U.S. will temporarily suspend its plan to levy reciprocal tariffs on most countries—with the exception of China—for three months.