The rapid spread of the coronavirus pandemic threatens to trigger a global recession and economic contraction that some say has remained unseen since the Second World War.

Economists continue to slash growth projections – St. Louis Fed president James Bullard recently predicted a 50 percent U.S. contraction in the worst-case scenario – as governments rush to provide monetary and fiscal support, in addition to unprecedented health measures such as nationwide lockdowns.

Likewise, the coronavirus pandemic has global lenders adjust their views with a more pessimistic skew and amongst the pack, American players have emerged as the most bearish observers.

50-Year Low

In a matter of weeks, major American banks have rushed to announce some of the most bearish growth projections amongst global financial giants. J.P. Morgan, Goldman Sachs and Morgan Stanley predict global growth in the second quarter to register -14 percent, -24 percent and -30 percent, respectively.

«As we resign ourselves to the inevitability of a large and broad-based shock to global growth, the key issue is whether we can avoid a traditional and longer-lasting recession event,» said J.P. Morgan in a note earlier this month.

«The sudden stop in US economic activity in response to the virus is unprecedented, and the early data points over the last week strengthen our confidence that a dramatic slowdown is indeed already underway,» added Goldman Sachs in a note last Friday.

European Banks Split

In Europe, banks are similarly expressing pessimism about the economy in the second quarter activity albeit with some relatively more positive views. Credit Suisse expects a «historical hit» to economic activity this year, especially in Q2 where it expects a 10-15 percent contraction. UBS called it previous U.S. assumptions «invalid» and «too rosy» and now expects a deep recession that could lead the country’s GDP to drop almost 10 percent in the next quarter.

Elsewhere in Europe, though, extreme pessimism is also at play. Deutsche Bank, for example, is calling for the worst global recession since the last World War.

«The quarterly declines in GDP growth [our economists] anticipate substantially exceed anything previously recorded going back to at least World War II,» the bank said in a note last week, stressing that investors should note the uncertainty of the bank’s projections due to the unprecedented current events.