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JPMorgan CEO Jamie Dimon Warns about the Recession   

US recession is "expected" in 6 to 9 months, says JPMorgan CEO Jamie Dimon

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Sadaf Hasan
Sadaf Hasan
Aspiring reporter covering trending topics

UNITED STATES: JPMorgan Chase CEO Jamie Dimon warned about the recession on Monday. He added that the US and global economies are facing a “very, very dangerous” combination of headwinds that will almost certainly result in a recession by the middle of next year.

In an interview with the business news channel, he listed several warning signs of a probable recession, including runaway inflation, significant interest rate increases, the Russian invasion of Ukraine, and the unknowable implications of the Federal Reserve’s quantitative tightening programme. However, he said that compared to the global financial crisis of 2008, the US is “really still performing well,” and consumers are probably in a better situation.

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”These are very, very serious issues that I think are likely to push the US and the world — I mean, Europe is already in recession — and they’re likely to put the US in some kind of recession six to nine months from now,” Dimon said to CNBC at a conference in London.

As inflation soared to a 40-year high over the past 18 months, Dimon claimed that the US Federal Reserve “waited too long and did too little.” Having increased rates five times already this year, he claimed that the central bank is “obviously catching up.” And, he continued, “Let’s all wish him [Fed chair Jerome Powell] well from here and cross our fingers that they succeeded to slow down the economy sufficiently so that whatever it is, is mild – and it is doable.”

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However, the head of the bank said he anticipated erratic market behaviour that would go hand in hand with disorganised financial circumstances. Dimon predicted that the benchmark S&P 500 might drop “another easy 20%.” He added, “The next 20% would be far more unpleasant than the first.”

The dramatic financial downturn has been predicted by Dimon before. He claimed in June that he was getting the bank ready for an economic “storm.” He claimed, ”JP Morgan is preparing ourselves, and we’re going to be very cautious with our balance sheet.”

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Dimon is not alone in expecting difficult times. The US economy is on “a difficult voyage to a better destination,” according to head economist Mohamed El-Erian of the German financial services giant Allianz SE.

In June, Goldman Sachs predicted that there was a 30% possibility that the US economy would enter a recession during the following year, while Morgan Stanley researchers estimated that there was a 35% likelihood of such a development.

Managing Director of the International Monetary Fund Kristalina Georgieva and President of the World Bank David Malpass both cautioned on Monday of the increasing possibility of a global recession and noted that inflation remained a problem following Russia’s invasion of Ukraine.

Also Read: US Economy Shrinks for a Second Quarter, Sparks Fears of Imminent Recession

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