Runaway inflation, massive rates of interest hikes, Russian invasion of Ukraine are amongst indicators of a possible recession, he stated.
JPMorgan Chase & Co Chief Govt Jamie Dimon has stated in an interview with CNBC that the USA and the worldwide financial system may tip right into a recession by the center of the subsequent yr.
Runaway inflation, massive rates of interest hikes, the Russian invasion of Ukraine and the unknown results of the Federal Reserve’s quantitative tightening coverage are among the many indicators of a possible recession, he instructed the enterprise information channel on Monday.
“These are very, very severe issues which I believe are more likely to push the US and the world — I imply, Europe is already in recession — and so they’re more likely to put the US in some type of recession six to 9 months from now,” Dimon stated.
The interview aired as the large US banks are set to report their third-quarter earnings from Friday. Up to now this yr, the benchmark S&P 500 index has fallen 24 p.c with all of the three main US indices buying and selling in bear market territory.
Dimon stated the S&P 500 may fall by “one other straightforward 20 p.c” from the present ranges with the subsequent 20 p.c slide more likely to “be way more painful than the primary”.
This yr, Dimon had requested buyers to brace for an financial “hurricane”, and JPMorgan, the most important US funding financial institution, suspended share buybacks in July after lacking Wall Avenue’s quarterly expectations.
In June, Goldman Sachs had predicted a 30 p.c likelihood of the US financial system tipping into recession over the subsequent yr whereas the economists at Morgan Stanley positioned the chances of a recession for the subsequent 12 months at round 35 p.c.
World Financial institution President David Malpass and Worldwide Financial Fund Managing Director Kristalina Georgieva additionally warned on Monday of a rising danger of worldwide recession and stated inflation remained an issue after Russia’s invasion of Ukraine.