Part 6/11:
Overvalued Stock Market: JPMorgan also highlights that despite recent stock market gains—such as the bull market that started in June 2023—stock valuations remain overextended. This overvaluation, combined with high interest rates and narrow market breadths, suggests the market might be vulnerable to corrections should recession fears intensify.
High Interest Rates: Elevated borrowing costs act as a brake on demand. Companies and consumers alike are less inclined to take out loans for expansion or purchases, leading to slower economic activity.