NEW YORK (VINnews) — JPMorgan Chase & Co Chief Executive Jamie Dimon warned that the US and the global economy could tip into a recession by the middle of the next year, according to a report by CNBC Monday.
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Runaway inflation, big interest rates hikes, the Russian invasion of Ukraine and the unknown effects of the Federal Reserve’s quantitative easing policy are among the indicators of a potential recession, Dimon said in the interview.
$JPM CEO Jamie Dimon sat down with @CNBCJulianna for a CNBC exclusive interview. Juliana joins us with the highlights: pic.twitter.com/MyagAbU9CO
— Squawk Box (@SquawkCNBC) October 11, 2022
“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. However he added that the US is “actually still doing well” and consumers were likely to be in better shape compared with the global financial crisis in 2008.
His comments come as the big U.S. banks are set to report their third-quarter earnings from Friday. So far this year, the benchmark S&P 500 index has lost about 24%, with all the three major U.S. indices trading in bear market territory.
Dimon said the S&P 500 could fall by “another easy 20%” from the current levels, with the next 20% slide likely to “be much more painful than the first”, according to the CNBC report.
Earlier this year, Dimon had asked investors to brace for an economic “hurricane”, with JPMorgan, the biggest U.S. investment bank, suspending share buybacks in July after missing quarterly Wall Street expectations.
The comments from Dimon, whose economic pronouncements are closely followed by investors, followed similar remarks last month by billionaire investor Ken Griffin and point to a growing consensus among senior figures on Wall Street about the likelihood of a US recession.
In June, Goldman Sachs had predicted a 30% chance of the U.S. economy tipping into recession over the next year, while the economists at Morgan Stanley placed the odds of a recession for the next 12 months at around 35%.
World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva also warned Monday of a growing risk of global recession and said inflation remained a problem after Russia’s invasion of Ukraine.
“Warning someone” usually means making someone aware of a certain threat and that someone should take action to prevent it. However, this is not the case here, first we are all aware of the possible recession for a long time, and second there’s not much we can’t really do. That’s a cycle כגלגל החוזר.