Jamie Dimon is the CEO of JPMorgan global investment bank. He warned that the U.S. might be heading for recession in 6-9 months. “This is serious stuff,” the executive stressed, adding that the stock market could easily fall another 20%.
JPMorgan CEO Jamie Dimon’s Warnings
Jamie Dimon from JPMorgan spoke out about his fears regarding the U.S. and stock markets in an interview that he did with CNBC Monday during the JPM Techstars conference.
Dimon listed a variety of indicators that could lead to the U.S. economic going into recession. These include runaway inflation and higher interest rates than anticipated, as well as the effect of quantitative easing and the Russia-Ukraine conflict. Stating that “Europe is already in recession,” the JPMorgan boss said:
These are very, very serious things which I think are likely to push the U.S. and the world … in some kind of recession six to nine months from now.
The executive noted that the Federal Reserve is “clearly catching up” as inflation reached a 40-year high, emphasizing that the central bank “waited too long and did too little.” Dimon opined: “And, you know, from here, let’s all wish him [Fed’s chairman] success and keep our fingers crossed that they managed to slow down the economy enough so that whatever it is, is mild — and it is possible.”
Nonetheless, he believes that the U.S. economy is “actually still doing well,” adding that consumers are likely to be in better shape than during the 2008 global financial crisis. But he warned:
But you can’t talk about the economy without talking about stuff in the future — and this is serious stuff.
Answering a question on how long the U.S. will be in recession for, he said that it was impossible to know. He advised market participants to consider a variety of possible outcomes. “It can go from very mild to quite hard and a lot will be reliant on what happens with this war. So, I think to guess is hard, be prepared,” the JPMorgan chief stated.
Dimon was also asked about the outlook for the S&P 500. Dimon stressed that markets are volatile, and the benchmark might fall further below current levels. “It may have a ways to go. It really depends on that soft-landing, hard-landing thing and since I don’t know the answer to that, it’s hard to answer … it could be another easy 20%,” the JPMorgan executive replied, elaborating:
The 20% that follow would be more severe than the previous 20.
“Rates going up another 100 basis points will be a lot more painful than the first 100 because people aren’t used to it, and I think negative rates — when all is said and done — will have been a complete failure,” he concluded. At the time of writing, the S&P 500 has already dropped 25% year-to-date.
Dimon warned of an imminent economic crisis in June and advised the public to prepare. In August, the JPMorgan boss doubled down on his warning, cautioning that “something worse” than a recession could be coming.
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