A recent survey by JPMorgan has highlighted tariffs and inflation as the main forces shaping global markets in 2025, with geopolitical tensions also emerging as a key factor. Conducted among 4,233 institutional trading clients, the annual poll showed that 51% of respondents expect tariffs and inflation to be the most significant drivers this year. This marks a sharp increase from the 27% who flagged inflation as a concern in 2024.
In addition to inflation, 41% of traders cited volatility as their primary challenge, up from 28% last year. Meanwhile, the likelihood of a recession impacting market movement has decreased, with only 7% of traders highlighting it as a risk this year, compared to 18% in 2024.
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The poll also shed light on key concerns within the market structure, including access to liquidity, regulatory shifts, and rising costs associated with market data.
The Tariff Showdown
This year’s tariff drama kicked off with President Donald Trump’s announcement of aggressive measures targeting the U.S.’s top three trade partners—Canada, China, and Mexico. These included a 25% tariff on goods from neighboring countries and a 10% additional tariff on Chinese imports. In retaliation, Canada and Mexico prepared to impose reciprocal tariffs, but a diplomatic breakthrough led to a temporary delay in enforcement.
On the other side of the globe, China responded with its new tariffs on American goods, including crude oil and agricultural machinery, escalating trade tensions even further.
Inflation’s Ripple Effect
Chicago Federal Reserve President Austan Goolsbee issued a warning this week about the potential inflationary fallout from the tariff policies. He noted that if inflation picks up in 2025, it will be critical for the Fed to differentiate whether the rise is due to economic overheating or a result of tariffs. This distinction, he argued, will play a pivotal role in shaping the Fed’s future policy decisions.
Experts estimate that the average price of new cars could surge by $3,000, and full-sized trucks might see a price hike of up to $10,000, as the U.S. imports 22% of its vehicles from Canada and Mexico. Meanwhile, fuel prices are expected to jump by as much as 40 cents per gallon, due to Canada being a major supplier of oil for the U.S., sending about 20% of the nation’s oil consumption. GasBuddy’s Patrick De Haan predicts these price increases could hit within days of the tariffs coming into play.
