JPMorgan Chase CEO Jamie Dimon on Monday warned that a “very, very serious” mix of headwinds would likely tip the U.S. and global economy into recession by the middle of next year.
Dimon said the U.S. economy was “actually still doing well” at present and consumers were likely to be in better shape compared to the 2008 global financial crisis.
“But you can’t talk about the economy without talking about stuff in the future — and this is serious stuff,” Dimon told CNBC’s Julianna Tatelbaum on Monday at the JPM Techstars conference in London.
WATCH:
BREAKING: JPMorgan Chase CEO Jamie Dimon tells CNBC that the U.S. is likely going to tip into a recession in the next 6 to 9 months https://t.co/2xMnmlj1ZD pic.twitter.com/JvFgWmnXd6
— CNBC Now (@CNBCnow) October 10, 2022
Jamie Dimon says US, world headed for recession in 2023: 'This is serious stuff' https://t.co/wzoTPtEjwg pic.twitter.com/xFvBd0ITJP
— New York Post (@nypost) October 10, 2022
Stocks could fall another 20%, Jamie Dimon says, a 'much more painful drop' https://t.co/xOIrXxEv1v
— MarketWatch (@MarketWatch) October 10, 2022
CNBC reported:
Among the indicators ringing alarm bells, Dimon cited the impact of runaway inflation, interest rates going up more than expected, the unknown effects of quantitative easing and Russia’s war in Ukraine.
“These are very, very serious things which I think are likely to push the U.S. and the world — I mean, Europe is already in recession — and they’re likely to put the U.S. in some kind of recession six to nine months from now,” Dimon said.
His comments come at a time of growing concern about the prospect of an economic recession as the Federal Reserve and other major central banks raise interest rates to combat soaring inflation.
Speaking to CNBC last month, Chicago Federal Reserve President Charles Evans said he’s feeling apprehensive about the U.S. central bank going too far, too fast in its bid to tackle high inflation rates.
The Fed raised benchmark interest rates by three-quarters of a percentage point last month, the third consecutive increase of that size. Fed officials also indicated they would continue hiking rates well above the current range of 3% to 3.25%.
As MarketWatch noted, stocks could fall ‘another easy 20%’:
JPMorgan Chase & Co. JPM, -0.79% CEO Jamie Dimon warned investors on Monday that he expects markets to remain volatile for the foreseeable future, and that the S&P 500 could easily fall another 20% as the Federal Reserve continues to raise interest rates.
Asked by CNBC about where he expects stocks to bottom, Dimon said he couldn’t say for sure, but that it’s easy to imagine the S&P 500 falling by another 20% as volatile markets become even more “disorderly” as rates continue to climb.
“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%,” Dimon said.
“The next 20% could be much more painful than the first. 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.”
Europe is already in a recession, Dimon said, and he expects a recession in the U.S. will arrive within “six to nine months.”
An eventual economic downturn in the U.S. could range from “very mild to quite hard.” Ultimately, it will depend on the outcome of the war in Ukraine, Dimon added.
Dimon’s warning on Monday follows his previous message from June that a ‘hurricane’ is coming to the U.S. economy.
“You better brace yourself,” Dimon said.
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