JPMorgan CEO Dimon warns of US recession in six to nine months

JPMorgan CEO Dimon warns of US recession in six to nine months

JPMorgan Chase & Co Chief Executive Jamie Dimon said runaway inflation, big interest rates hikes, the Russian invasion of Ukraine and the unknown effects of the Federal Reserve’s quantitative tightening policy are among the indicators of a potential recession. — Reuters pic

Tuesday, 11 Oct 2022 10:02 AM MYT

NEW YORK, Oct 11 — JPMorgan Chase & Co Chief Executive Jamie Dimon said the United States and the global economy could tip into a recession by the middle of the next year, CNBC reported yesterday.

Runaway inflation, big interest rates hikes, the Russian invasion of Ukraine and the unknown effects of the Federal Reserve’s quantitative tightening policy are among the indicators of a potential recession, he said in an interview to the business news channel.

“These are very, very serious things which I think are likely to push the US and the world — I mean, Europe is already in recession — and they’re likely to put the US in some kind of recession six to nine months from now,” Dimon said.

His comments come as the big US banks are set to report their third-quarter earnings from Friday. So far this year, the benchmark S&P 500 index .SPX has lost about 24 per cent, with all the three major US indices trading in bear market territory.

Dimon said the S&P 500 could fall by “another easy 20 per cent” from the current levels, with the next 20 per cent 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 US investment bank, suspending share buybacks in July after missing quarterly Wall Street expectations.

In June, Goldman Sachs had predicted a 30 per cent chance of the US 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 per cent.

World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva also warned yesterday of a growing risk of global recession and said inflation remained a problem after Russia’s invasion of Ukraine. — Reuters