JPMorgan Chase CEO warns economic downturn 'likely' in 6 to nine months

Ryan King

Oct 10, 02:15 PM October 10, 02:15 PM

JPMorgan Chase CEO Jamie Dimon is warning that a recession could strike the United States in just the following six to 9 months.

Conceding that the U.S. financial system is “actually however carrying out well” at the moment, Dimon, one of the foremost voices in finance, theorized that a “very, really serious” storm of financial headwinds could shortly converge and tip the overall economy into recession territory in the not-way too-distant upcoming.

JAMIE DIMON WARNS OF Economic 'HURRICANE'

"You can not speak about the economic system without having conversing about stuff in the long run — and this is serious things,” Dimon instructed CNBC’s Julianna Tatelbaum Monday.

"These are pretty, quite severe factors which I think are probable to push the U.S. and the earth — I mean, Europe is currently in recession — and they are probable to place the U.S. in some type of recession six to nine months from now," he extra.

Dimon has sounded the alarm about the economic climate in the past. In June, he rattled investors by warning that an financial "hurricane" was looming. The JPMorgan main has prolonged been outspoken with his sights on community policy and routinely delivers his outlook on the U.S. economy.

In August, the Bureau of Financial Investigation uncovered the U.S. economy contracted at an annualized level for the next quarter in a row, usually a benchmark employed to determine a economic downturn. Nevertheless, the Nationwide Bureau of Financial Analysis declined to declare a economic downturn officially.

Even with the lackluster gross domestic merchandise figures, some facets of the overall economy surface to be buzzing together. The most latest unemployment figures for September arrived in all-around 3.5%, down from the prior month and in the vicinity of file lows. Generally, in a recession, unemployment figures spike up.

Nevertheless, inflation carries on to grip the country. For the 12 months ending in August, inflation came in at a scorching 8.3%, which is notably down from the prior month but exceeded anticipations. That spooked marketplaces, in portion mainly because it signaled that the Federal Reserve would possible keep on jacking up interest prices and tightening monetary plan.

The Fed lately bumped up rates by 3-quarters of a percentage issue last month. Dimon surmised that the Fed “waited far too long and did far too little” on inflation for the duration of the early times and claimed he was not positive if Fed Chairman Jerome Powell could attain a "delicate landing."

“From below, we — let us all want him results and maintain our fingers crossed that they managed to sluggish down the overall economy enough so that what ever it is, is moderate — and it is possible,” Dimon told CNBC.

Some finance gurus, these kinds of as Wharton professor Jeremy Siegel, have fretted that the Fed could be pumping the brakes way too hard. In addition to the prospect of the Fed sucking the wind out of the financial sails, economic difficulties overseas could ripple back household domestically, according to Dimon.

Europe is staring down an strength disaster exacerbated by the war in Ukraine. OPEC+ recently announced plans to slash oil output by 2 million barrels a working day, very likely ushering in larger charges at the pump at residence. On top of that, China's economy has slowed drastically amid its real estate woes and stringent COVID-19 policies.

Dimon previously explained that JPMorgan Chase, the premier nongovernment U.S. lender, options to be "conservative with our balance sheet" as it braces for an economic storm. In his CNBC interview, he acknowledged that he wasn't absolutely sure how critical a economic downturn could be.

“It can go from pretty moderate to really difficult and a ton will be reliant on what happens with this war. So, I think to guess is really hard, be geared up,” he informed the outlet.

The banking titan also hypothesized that the benchmark S&P 500 could plummet downward by “another easy 20%.”