Jamie Dimon warns U.S. prone to tip into recession soon

JPMorgan Chase CEO Jamie Dimon on Monday warned that a “very, very serious” mixture of headwinds was prone to tip each the U.S. and global economy into recession by the center of next 12 months.

Dimon, chief executive of the most important bank within the U.S., said the U.S. economy was “actually still doing well” at present and consumers were prone to be in higher shape compared with the 2008 global financial crisis.

“But you possibly can’t talk concerning the economy without talking about stuff in the longer term — and that is serious stuff,” Dimon told CNBC’s Julianna Tatelbaum on Monday on the JPM Techstars conference in London.

Amongst the symptoms ringing alarm bells, Dimon cited the impact of runaway inflation, rates of interest going up greater than expected, the unknown effects of quantitative tightening and Russia’s war in Ukraine.

“These are very, very serious things which I feel are prone to push the U.S. and the world — I mean, Europe is already in recession — they usually’re prone to put the U.S. in some sort of recession six to nine months from now,” Dimon said.

His comments come at a time of growing concern concerning the prospect of an economic recession because the Federal Reserve and other major central banks raise rates of interest to combat soaring inflation.

Chatting with CNBC last month, Chicago Federal Reserve President Charles Evans said he’s feeling apprehensive concerning the U.S. central bank going too far, too fast in its bid to tackle high inflation rates.

The Fed raised benchmark rates of interest by three-quarters of a percentage point last month, the third consecutive increase of that size. Fed officials also indicated they might proceed mountain climbing rates well above the present range of three% to three.25%.

Dimon said that while the Fed “waited too long and did too little” as inflation jumped to four-decade highs, the central bank is “clearly catching up.”

“And, you recognize, from here, let’s all wish him success and keep our fingers crossed that they managed to decelerate the economy enough in order that whatever it’s, is mild — and it is feasible,” he added.

Dimon said he couldn’t be certain how long a recession within the U.S. might last, adding that market participants should assess a spread of outcomes as a substitute.

“It could possibly go from very mild to quite hard and quite a bit can be reliant on what happens with this war. So, I feel to guess is tough, be prepared.”

Dimon said the one guarantee he may very well be sure of was volatile markets. He also warned that this might coincide with disorderly financial conditions.

Asked for his views on the outlook for the S&P 500, Dimon said the benchmark could yet fall by “one other easy 20%” from current levels, adding that “the subsequent 20% could be rather more painful than the primary.”