The United States should prepare for a “boiled frog” recession as interest rates tighten due to high inflation, which could trigger another global recession, JPMorgan Chase warned in a new report cited by Markets Insider and Barrons.

The metaphor “boiled frog in water” is often used to refer to situations where people or authorities do not react to a problem until it is too late, and then it becomes more serious and has wider consequences.

In a new report, JPMorgan, one of the world’s largest investment banks, analyzed several possible scenarios for the rest of this year and next, concluding that, overall, another recession is more likely than not.

The most likely scenario, which economists at the investment bank estimate has a 36% probability, involves the US entering recession at the same time as the global economy.

Germany, the EU’s largest economy, officially entered recession in the first quarter of this year after further contraction in GDP.

The JPMorgan report notes that the main catalyst for a future global recession, if it materializes, will be a tightening of monetary policy in response to inflation, which remains persistently high in many countries, including the United States.

New fears about the US entering a recession

Bruce Kasman, the bank’s chief economist and lead author of the report, says this risk has increased despite the precautionary measures taken by central banks. For example, the Fed, the central bank in Washington, just announced this month that it will take a break from raising its benchmark interest rate.

But Casman says that such a gradual approach risks entrenching an “inflationary mindset in the system,” but that a rapid rise in base interest rates poses another danger: tightening the economy into a downward spiral.

The reference to the “boiled frog” refers to the first scenario, where Casman states that the European Union and the United Kingdom are in the same situation as the United States.

The second most likely scenario JPMorgan sees, with a 32% chance, is a moderate US recession at the end of this to early 2024, while the world’s other major economies prove more resilient.

The report estimates only a 23 percent chance that the U.S. economy will emerge from recession altogether and a 10 percent chance that it will enter one by mid-2023.

Major U.S. banks began bracing for a possible recession earlier this year, but the sudden collapse of Silicon Valley Bank in March caused further turmoil in a sector that looks increasingly fragile.

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