JPMorgan CEO Jamie Dimon Warns Recession Could Hit in 6 Months, Stock Market Could Drop 20% More – At the JPM Techstars conference in London, JPMorgan CEO Jamie Dimon spoke with CNBC and warned about the U.S. economy and stock market. Indicators such as runaway inflation, unexpectedly high interest rates, the consequences of quantitative easing, and the conflict between Russia and Ukraine were just a few that Dimon listed as potential recession triggers for the US economy.
The head of JPMorgan 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 head of JPMorgan claimed that Europe is already in recession. The executive emphasized that the Federal Reserve “waited too long and did too little,” noting that the central bank is “clearly catching up” as inflation hit a 40-year high.
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“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,” said Dimon. However, he asserts that the American economy is really still performing well, and that consumers are probably in a better situation today than they were before the global financial crisis of 2008. “But you can’t talk about the economy without talking about stuff in the future — and this is serious stuff” he stressed.
He acknowledged that he couldn’t say for sure how long the American economy would remain in recession, recommending market players to consider a variety of possibilities. “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.
Also brought up was Dimon’s prediction for the S&P 500. He emphasized that the benchmark could decline further from its current levels and that the markets would be erratic. “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 next 20% would be much more painful than the first.”
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“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. The S&P 500 has lost 25% so far this year. In June, Dimon warned that an economic hurricane was coming, advising people to brace themselves. In August, the JPMorgan boss doubled down on his warning, cautioning that something worse than a recession could be coming.