Dimon said in June that he was preparing the bank for an economic “hurricane” caused by the Federal Reserve and Russia’s war in Ukraine.
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Dimon, the CEO of the largest bank in the United States, said the U.S. economy is “actually still doing well” at the moment and consumers are likely to be in better shape compared to the 2008 global financial crisis.
“But you can’t talk about the economy without talking about things in the future — and these are serious things,” Dimon told CNBC’s Julianna Tatelbaum on Monday.
Among the indicators ringing alarm bells, Dimon cited the impact of runaway inflation, interest rates rising more than expected, the unknown effects of quantitative easing and Russia’s war in Ukraine.
“These are very, very serious things that I think are likely to pressure the United States and the world — I mean, Europe is already in recession — and they’re likely to put the United States in some kind of recession six to nine months from now,” Dimon said.
His comments come at a time of growing concern about the prospect of an economic recession as the Federal Reserve and other major central banks raise interest rates to combat rising inflation.
Last month, Chicago Federal Reserve President Charles Evans spoke to CNBC said he feels concerned that the US Federal Reserve is going too far, too fast in its attempt to tackle high inflation rates.
The Fed raised benchmark interest rates by three-quarters of a percentage point last month, the third straight increase of that size. Fed officials also indicated that they would continue to raise interest rates well above the current range of 3% to 3.25%.
Dimon said that while the Fed “waited too long and did too little” when inflation jumped to four-decade highs, the central bank is “clearly catching up.”
“From here, let’s all wish him luck and cross our fingers that they managed to slow down the economy enough so that whatever it is is mild – and it’s possible,” he added.
Dimon said he could not be sure how long a U.S. recession could last, adding that market participants should instead assess a range of outcomes.
“It could go from very mild to quite severe and a lot will depend on what happens with this war. So, I think it’s hard to guess, be prepared.”
Dimon said the only guarantee he could be sure of was volatile markets. He also warned that this could coincide with troubled economic conditions.
Asked for his views on the outlook for S&P 500Dimon said the benchmark could still fall “closer to 20%” from current levels, adding that “the next 20% would be much more painful than the first.”
Dimon spoke to a lot of analysts and investors in early June said he prepared the bank for an economic “hurricane” caused by the Federal Reserve and Russia’s war in Ukraine.
“JPMorgan is arming us and we will be very conservative with our balance sheet,” Dimon said at the time. He advised investors to do the same.
Market participants are monitoring a much-anticipated inflation print on Thursday as well as a number of corporate earnings.
JPMorgan is scheduled to announce third-quarter financial results on Friday.
The bank’s shares are down about 33% year-to-date.