Expect a 'Decaffeinated' Economy, but No Recession This Year: JPMorgan's Kelly

"Consumer spending was very strong in the second quarter, in the third quarter, [and] even into the fourth quarter … and that helped growth accelerate to about 3% year over year," Kelly said.

However, similar to a caffeine or sugar rush, the effects of the tax cut on the economy fade.

"This is just a sugar rush basically. As you go into this year, consumer spending is slowing down," Kelly said. "The tax cuts are good, but they raise consumer spending to a higher level but they don't do further growth thereafter. The tax cuts are in place so they're not going to add to growth now."

This is why Kelly expects that this year the U.S. will have a "decaffeinated economy."

"Growth of consumer spending is going to slow, growth of investor spending is not that strong, [and] the global economy is slowing down," he said. "All of these things say that we are going to slow down."

Originally, Kelly said, he thought the economy would get through the second quarter of this year before the slowdown hit.

"In the second quarter we get one last refill of caffeine, and that is the alternative minimum tax, … which was going to be a big tax cut for select middle- and upper-income households in April," he explained. "And that was going to help us. And that is [still] going to help us. The problem is the government shutdown itself and the uncertainty caused by the trade war has put such a break in the economy in the first quarter that I think we're coming in for a soft landing a little earlier than we hoped."

Kelly emphasized that he thinks the economy can still keep growing.

"Even though the economy is slowing down, it doesn't mean it's slowing down to a crawl," he said. "It doesn't mean it's slowing down to a stall, it could just slow down from 3% growth to 2% growth."

— Related on ThinkAdvisor:

• Taxes, Health Care, Regs: What Advisors Can Expect After Midterms
• Expect Fewer Recessions but Weaker Recoveries: JPMorgan