CNBC reported on Monday, October 10 that JPMorgan Chase & Co. chief executive Jamie Dimon stated the United States and global economy could enter a recession by the middle of next year.
In an interview with a business news channel, he cited runaway inflation, large interest rate hikes, the Russian invasion of Ukraine, and the unknown impacts of the Federal Reserve’s quantitative tightening program as symptoms of a probable recession.
“These are extremely grave issues that I believe will force the United States and the rest of the globe — Europe is already in recession – into a recession in the next six to nine months,” Dimon said.
On Friday, October 14, the major US banks are scheduled to disclose their third-quarter earnings. The benchmark S&P 500 index has lost almost 24% so far this year, and all three major US indices are trading in bear market territory.
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According to the CNBC story, Dimon stated that the S&P 500 might fall by “another easy 20%” from its current level, with the following 20% decline likely to be “far more severe than the first.”
JPMorgan, the largest US investment bank, suspended share buybacks in July after failing to meet quarterly Wall Street forecasts. Earlier this year, Dimon had warned investors to prepare for an economic “storm.”
In June, Goldman Sachs predicted a 30% likelihood of recession for the US economy over the next year, while Morgan Stanley experts anticipated a 35% chance of recession for the next 12 months.
After Russia’s invasion of Ukraine, World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva warned on Monday of an increasing risk of a global recession and said inflation remained a concern.
