Recession expected in 6-9 months, warns JPMorgan CEO Jamie Dimon
What's the story
Six to nine months—that's how much time Jamie Dimon, the CEO of JPMorgan Chase & Co, gives the US and global economy before they slip into a recession. When the CEO of one of the world's biggest banking institutions says so, how can we disregard that? Moreover, the World Bank, International Monetary Fund (IMF), Goldman Sachs, and Morgan Stanley have also warned about recession.
Context
Why does this story matter?
The fears of an impending recession next year may not be far-fetched after all. JPMorgan's CEO has joined a growing list of banking giants who foresee economic turmoil. Europe is already reeling under economic strain. Soon, the US and the rest of the world may also join it. A recession next year will be too much for an economy recovering from the COVID-19 pandemic.
Recession
Recession in Europe might affect the US economy: Dimon
In an interview with CNBC, Dimon talked about "serious" headwinds that will likely push the US and global economies into recession. He said, "I mean, Europe is already in recession — and they're likely to put the US in some kind of recession six to nine months from now." From his words, it was clear that he saw the recession as an inevitable event.
Factors
Inflation, interest rate, war, etc. could be the reasons
Dimon's prediction is based on multiple indicators and global issues. Surging inflation, rising interest rates, the Federal Reserve's decision to end quantitative easing, and the Russia-Ukraine war, among other factors, will affect the economy, he said. This is not the first time Dimon has talked about an impending recession. Earlier this year, he asked investors to brace for an economic "hurricane."
First hit
Dimon suspects credit market to be the first victim
Dimon's warning doesn't end there. He even mentioned some likely victims who are going to feel the brunt of the recession first. According to him, credit markets will press the panic button first. "It might be ETFs, it might be a country, it might be something you don't suspect," he said. He added the S&P 500 would continue its slide.
Information
If I was out there I'd be very cautious: Dimon
Dimon underlined his prediction with some advice. He mentioned previous economic crises that came out of nowhere and said, "I think you could predict this time that it probably will happen." He advised people to be cautious and raise money now if they need it.