April 19, 2024

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US Heads into Recession, ‘This Is Dangerous’ Says JPMorgan Chase President | US economy

The US economy and the global economy are facing a “very, very dangerous” mix of headwinds that is likely to cause a recession by the middle of next year, warned Jamie Dimon, CEO of JP Morgan Chase, the largest US investment bank, on Monday.

Dimon cited the effects of hyperinflation, sharp interest rate hikes and Russia’s war in Ukraine as factors that influenced his thinking. But, he added, the US is “in fact still doing well” and consumers are likely to be in a better position compared to the global financial crisis in 2008.

“You can’t talk about the economy without talking about things in the future — and these are serious things,” Dimon told CNBC at a conference in London.

“These are very serious things that I think are likely to push the United States and the world — I mean, Europe is already in recession — and potentially put the United States into some kind of recession six to nine months from now,” he added.

Damon said that the United States Federal Reserve “I waited too long and did too little” as inflation jumped to a 40-year high over the past 18 months. He said the central bank, which has raised interest rates five times so far this year, is “clearly catching up”.

“And you know, from here, let’s wish him all. [Fed chair Jerome Powell] We’ve succeeded and we’ve kept going because they’ve been able to slow the economy down enough that whatever moderates it — it’s possible.”

But the bank’s president said he expects volatile market conditions that may coincide with turbulent financial conditions. pointer Standard & Poor’s 500It could go down another easy 20%, Dimon said.

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“The next 20% will be much more painful than the first,” he added.

This isn’t the first time Dimon has warned of a tough financial milieu. In June, he said he was preparing the bank for an economic “hurricane”. “We are preparing ourselves and will be very conservative with our balance sheet,” JPMorgan said.

Damon is not alone in anticipating tough times. Over the weekend, Mohamed El-Erian, chief economic advisor at German financial services giant Allianz SE US economy The “Bumpy Journey to a Better Destination”.

El-Erian blamed the US central bank for exacerbating recession risks by waiting too long for an interest rate hike and then “pulling the brakes this year”.

“Not only does it have to beat inflation, it has to restore its credibility,” El-Erian said of the US central bank on CBS’ “Face the Nation.” “So, yes, I’m afraid we risk a very high probability of a devastating recession that could have been completely avoided.”