US heading for recession within months, warns JPMorgan chief

Jamie Dimon, president and CEO of JPMorgan Chase and Company - Evelyn Hawkstein / Reuters

Jamie Dimon, president and CEO of JPMorgan Chase and Company – Evelyn Hawkstein / Reuters

The US is heading into a recession within months, with the CEO of America’s largest bank saying he warned of a “very, very serious” mix of headwinds.

JP Morgan chief Jamie Dimon says unstoppable inflation, rising interest rates and Russia’s war in Ukraine By the middle of next year, America is likely to be in recession.

He warned that these three problems continue to weigh on the global economy, jeopardizing growth prospects in the coming months.

Dimon said: “These are very, very serious things that I think could push the United States and the world – I mean, Europe is already in a recession – and would put the United States in a kind of recession of six. It can take up to six. Nine months from now.

The Wall Street executive’s remarks come at a time of growing market uncertainty as many investors and traders see recent US employment data as a new catalyst for the US Federal Reserve. . Taking a tougher stance on inflation, markets are now Huge hikes in interest rates to cool the US economy.

Dimon said the Fed “expected too much and did too little” as inflation hit a 40-year high in the past 18 months. However, he added that the central bank “clearly understands”.

Fed officials have quintupled rates so far this year, from the current range of 3% to 3.25%, and said they expect a maximum of 4% by the end of this year.

Mr. Dimon told CNBC at a conference in London: “Let’s wish him well and cross our fingers so he can slow the economy down so that whatever happens is light – and it is possible.” I’m.

“It can range from very mild to quite difficult and will depend a lot on what happens with this war. So I think it’s hard to guess, get ready.

Mr. Dimon said he couldn’t predict how long a potential US recession might last, but said the economy is currently doing “really well” and compared to the 2008 global financial crisis it was probably in better shape. .

but given the messy financial situation and instability, the same cannot be said for the stock market. Dimon said the S&P 500, an index made up of the 500 largest US public companies, could still drop “another easy 20%” from current levels and “the next 20% will be much more painful than the former.” . .

All eyes are now on JPMorgan’s third quarter financial results, due out on Friday. The bank’s shares are traded at a 33% discount on an annual basis.

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