‘This Is Serious’: JPMorgan Chase CEO Warns US Recession Coming in 6 to 9 Months

JPMorgan CEO Jamie Dimon looks on during the inauguration the new French headquarters of JP Morgan bank in Paris, on June 29, 2021. Michel Euler/Pool via Reuters

JPMorgan Chase CEO Jamie Dimon warned that the United States is likely going to head into recession territory in the next six to nine months, adding that the S&P 500 could fall by “another easy 20 percent” in the near future.

“I mean, Europe is already in recession ... and they’re likely to put the U.S. in some kind of recession six to nine months from now,” Dimon told CNBC on Oct. 10.

Citing decades-high inflation and recent increases in interest rates, Dimon also noted unknown effects from the conflict in Ukraine and more Federal Reserve monetary tightening.

The Fed raised interest rates by three-quarters of a percentage point in September, the third consecutive rate increase of that amount. Officials with the central bank indicated that more rate boosts are on the way.

Dimon added that while the Fed “waited too long and did too little,” the U.S. central bank is “clearly catching up.”

“From here, let’s all wish [Fed Chair Jerome Powell] success and keep our fingers crossed that they managed to slow down the economy enough so that whatever it is, is mild—and it is possible,” he said.

How Long?

Dimon told CNBC that he’s unsure how long a recession in the United States could last.

“It can go from very mild to quite hard and a lot will be reliant on what happens with this war,” he added. “So, I think to guess is hard; be prepared.”

The U.S. economy contracted for two consecutive quarters in the first half of 2022, according to a late September government report, which places it technically in a recession. The country’s gross domestic product (GDP) fell by 0.6 percent on an annualized basis in the second quarter; the first-quarter GDP dropped by 1.6 percent.

Dimon said the S&P 500 could fall by “another easy 20 percent” from current levels, with the next 20 percent slide likely to “be much more painful than the first,” according to the report.

Earlier this year, Dimon had asked investors to brace for an economic “hurricane,” with JPMorgan, the biggest U.S. investment bank, suspending share buybacks in July after missing quarterly Wall Street expectations.

More Warnings

In June, Goldman Sachs had predicted a 30 percent chance of the U.S. economy tipping into recession over the next year, while the economists at Morgan Stanley placed the odds of a recession for the next 12 months at around 35 percent.

World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva also warned on Oct. 10 of a growing risk of global recession and said inflation remains a problem after Russia’s invasion of Ukraine.

“But you can’t talk about the economy without talking about stuff in the future—and this is serious stuff,” Dimon told CNBC’s Julianna Tatelbaum on Oct. 10 at the JPM Techstars conference in London.

In a recent conference, meanwhile, Citadel founder Ken Griffin said a recession or downturn seems inevitable in what appears to be a “hard landing” scenario, or when Fed’s efforts to reduce soaring prices could lead to higher unemployment rates along with a slowdown in economic growth.

“Everybody likes to forecast recessions, and there will be one,” Griffin, one of the richest men in the United States, said during the “Delivering Alpha” conference. “It’s just a question of when, and frankly, how hard.

“Is it possible [that at the end] of ’23, we have a hard landing? Absolutely.”

Reuters contributed to this report.