JPMorgan CEO Jamie Dimon warns of a ‘likely’ US recession in 6 to 9 months

JPMorgan Chase CEO Jamie Dimon predicted that the US economy is likely to slide into recession next year, warning that the downturn could trigger a “panic” in credit markets and destroy another 20 percent of the value of US bonds. would destroy shares.

Dimon’s comments, whose economic remarks are closely followed by investors, followed similar remarks by billionaire investor Ken Griffin last month and indicate a growing consensus among Wall Street leaders about the likelihood of a US recession.

In an interview with CNBC on Monday, Dimon cited rising interest rates and Russia’s invasion of Ukraine as factors fueling the risk of a 2023 downturn.

“These are very, very serious things that I think are likely to push the US and the world forward – I mean, Europe is already in a recession – and they’re probably going to put the US into some sort of six to nine months from now Recession plunge now,” Dimon was quoted as saying.

Dimon said the financial system was beginning to show signs of distress, pointing to the weak market for IPOs and high-yield debt deals, and predicted the pain would soon spread to other areas.

“The place where you’re likely to see more of a rift and maybe a little bit more panic is in credit markets,” he said.

In June, Dimon had warned of an economic “hurricane” and on Monday again encouraged investors to be “very, very cautious.” He added: “If you need money, raise it.”

When asked where he sees the bottom for the benchmark S&P 500 stock index, which is down more than 20 percent this year, Dimon said he may have “a long way to go” and “another easy 20 percent.” could be”.

“I think the next 20 percent will be a lot more painful than the first. Raising rates by another 100 basis points is a lot more painful than the first 100 because people are not used to it.”

JPMorgan, the largest US bank by assets, is set to announce earnings on Friday. Analysts are predicting that they, along with the other big banks, will set aside more than $4 billion to cover potential losses on bad loans, in a sign of growing pessimism in the US economy.