JPMorgan Chase chief executive Jamie Dimon says he sees only a 10% chance of an economic slowdown that doesn’t lead to a recession while warning that there are 20% to 30% chances of it becoming “something worse.”
The banking boss mentioned this on a client call that although the U.S. economy is still strong and the consumer balance sheets and businesses are in “good shape,” at the moment, there are storm clouds ahead.
Hiked fed rates, oil shocks, quantitative tightening, the war in Ukraine, and current rising U.S. tensions with China are making Dimon see reasons why a mild recession has a 20% to 30% chance, while a harder recession has the same odds.
Dimon has stressed that it will be a mistake to point to any single-point forecast as to what will happen with the U.S. economy, but he will be taking a pessimistic stance on the issue.
Dimon argues that confidence is low “because of inflation, partisan politics, and a lot of grudges from COVID-19.”
He has predicted that inflation will not decrease the way the Fed wants it to, as it is very unlikely that they’ll achieve the goal of bringing it down from 8% to 4% by the end of the year.
Dimon added that: “I wish we had the spirit that we were all here to work together, but it seems we just got nastier somehow.”
CEO recession predictions
Aside the JPMorgan boss’s prediction, which is vague, but direr than those of most other executives who have shared their predictions.
Goldman Sachs chief executive David Solomon has similarly warned that there is trouble lies ahead while urging people to prepare for the worst as regards inflation and an approaching recession,
CEO of BlackRock Larry Fink has told investors to keep calm and carry on— while calling the current market conditions as economic headwinds “business as usual” for long-term investors.
Deutsche Bank CEO Christian Sewing has given the odds of a recession a 50/50 chance, while Harvard economist and economic adviser to the White House under Barack Obama, Jason Furman, says it’s less likely than that.
This prediction was a mirror image of other Wall Street strategists, such as David Roche, who says this is a moment to realize that “things do turn around.”
But there are others more aligned with the fears of Dimon. Which includes Bitcoin bull Mike Novogratz who gave one of the most pessimistic predictions, saying that the U.S. was heading fast into a recession and concluding by saying “the economy is going to collapse.”
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