Business

JPMorgan chief warns US will be in recession within months


JPMorgan Chase and Chairman and CEO Jamie Dimon - EVELYN HOCKSTEIN / REUTERS

JPMorgan Chase and Chairman and CEO Jamie Dimon – EVELYN HOCKSTEIN / REUTERS

The CEO of America’s largest bank has said the US is facing a recession within the next few months as he warned of “a very, very severe mix” of headwinds.

Jamie Dimon, head of JPMorgan, said that inflation has not been tamedinterest rates rise, and Russia’s War in Ukraine likely to push the US into a recession by the middle of next year.

He warned that all three problems persisted for the global economy, challenging growth prospects in the coming months.

“These are very, very serious things that I think have the potential to push the US and the world – I mean, Europe is already in recession – and they have the potential to put the US into a recession,” Mr. Dimon said. there. nine months from now. “

The Wall Street executives’ comments come at a time of increasing market uncertainty, as recent strong US jobs data is seen by many investors and traders as a new catalyst. for the US Federal Reserve take a more hawkish stance on inflation. Market now pricing in higher interest rates to cool down the US economy.

Dimon said the Fed “waited too long and did too little” as inflation surged to a 40-year high in the past 18 months. However, he added that the central bank is “clearly catching up”.

Fed officials have raised rates five times so far this year to the current range of 3pc to 3.25pc, and indicated that they plan to top 4pc by the end of the year.

Mr Dimon told CNBC at a conference held in London: “Let’s all wish him success and hold us our fingers that they manage to slow the economy enough that regardless what it is, gentle – and it is possible.

“It can go from very mild to quite difficult and depends a lot on what happens with this fight. So I think guessing is hard, be prepared. “

Mr Dimon said he couldn’t predict how long a potential recession in the US could last, but commented that the economy is “really still doing well” and consumers are likely to stay in better shape than during the 2008 global financial crisis.

But with turbulent and volatile financial conditions, the same cannot be said for the stock market. Mr. Dimon said the S&P 500, an index that includes the 500 largest US public companies, could still fall “an easy 20 more points” from where it is now, and that “the next 20 points will be much more difficult than it is now.” with the first”.

All eyes will now turn to JPMorgan’s Q3 financial results, which are due to be released on Friday. The bank’s shares are trading at a discount of 33pc year-to-date.

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