Runaway inflation, big interest rate hikes, Russian invasion of Ukraine are among indicators of a potential recession, he said.
JPMorgan Chase & Co Chief Executive Jamie Dimon has said in an interview with CNBC that the United States and the global economy could tip into a recession by the middle of the next year.
Runaway inflation, big interest rate 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 told the business news channel on Monday.
“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.
The interview aired 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 has fallen 24 percent with all the three major US indices trading in bear market territory.
Dimon said the S&P 500 could fall by “another easy 20 percent” from the current levels with the next 20 percent slide likely to “be much more painful than the first”.
This year, Dimon had asked investors to brace for an economic “hurricane”, and JPMorgan, the biggest US investment bank, suspended share buybacks in July after missing Wall Street’s quarterly expectations.
In June, Goldman Sachs had predicted a 30 percent 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 percent.
World Bank President David Malpass and International Monetary Fund Managing Director Also Kristalina Georgieva warned on Monday of a growing risk of global recession and said inflation remained a problem after Russia’s invasion of Ukraine.