JPMorgan CEO Jamie Dimon warns that recession could be six months away and the stock market could fall another 20% – “This is serious stuff”

Global investment bank JPMorgan CEO Jamie Dimon warned that the U.S. economy could tip into recession within six to nine months. “This is serious stuff“, the executive stressed, adding that the stock market could easily fall another 20%.

JPMorgan CEO Jamie Dimon’s warnings

JPMorgan CEO Jamie Dimon shared his warnings about the U.S. economy and the stock market in an interview with CNBC on Monday at the JPM Techstars conference in London.

Jamie Dimon cited a number of indicators that could push the U.S. economy into recession, including runaway inflation, interest rates rising more than expected, the effects of quantitative easing and the Russia-Ukraine war. Asserting that “Europe is already in recession,” the JPMorgan boss said:

These are very, very serious things that I think are likely to push the U.S. and the world…into some sort of recession in the next six to nine months.

The executive noted that the Federal Reserve is “clearly playing catch-up“while inflation has reached its highest level in 40 years, noting that the central bank “waited too long and did too little.“Dimon opined, “And, you know, from here on out, let’s all wish them well and cross our fingers that they’ve managed to slow the economy enough that, whatever it is, it’s going to be smooth – and it can be.“

Nevertheless, he believes that the American economy “is still doing well“, adding that consumers are probably in better shape than they were during the 2008 global financial crisis. However, he cautioned:

But you can’t talk about the economy without talking about the future – and that’s a serious topic.

In response to a question about how long the U.S. economy is likely to be in recession, he admitted that he could not be certain, advising market participants to assess a range of outcomes. “It can range from very mild to very harsh and a lot will depend on what happens with this war. So, I think it’s hard to guess, be prepared“, said the head of JPMorgan.

Jamie Dimon was also asked about the outlook for the S&P 500 Index, noting that markets will be volatile and that the benchmark index could fall further from current levels. “It may still have a ways to go. It really depends on soft landing and hard landing, and since I don’t know the answer to that question, it’s hard to answer… It could be another 20%“, replied the JPMorgan executive, noting:

The next 20% would be much more painful than the first.

“Another 100 basis point rate hike will be much more painful than the first 100 because people are not used to it, and I think negative rates – when all is said and done – will have been a complete failure“, he concluded. As of this writing, the S&P 500 is already down 25% year-to-date.

In June, Jamie Dimon warned that an economic hurricane was coming, advising people to be prepared. In August, the JPMorgan boss repeated his warning, warning that “something worse” that a recession could occur.