The head of the world’s largest bank, JPMorgan Chase, Jamie Dimon, asserted that the situation facing the world economy is “very, very serious.” The CEO expressed a similar concern in June, asking investors to brace for an economic “hurricane”, as reported by CoinChapter.com at the time.
JPMorgan CEO Dimon warns of recession in US Ahead
The head of the biggest US investment bank claimed on Monday that the ongoing conflict in Ukraine, major interest rate hikes by the Federal Reserve, and skyrocketing inflation are among the indicators of a potential recession. The aforementioned factors would cause the US economy to enter a recession, Dimon added.
Even though the recession may already be well underway, the CEO saw a beacon of hope and stated that the US economy was “actually still doing well.”
“These are very, very serious things which I think are likely to push the US and the world – 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,” said Dimon.
Not the first warning: Reiteration of economic recession by Jamie Dimon
The dramatic financial downturn has been predicted by Dimon before. In June 2022, Jamie Dimon said that several QE program elements, such as negative rates, “backfired”. The main focus of the impending “hurricanes,” however, was the conflict in Ukraine and the ensuing increases in oil prices.
“Wars go bad, [they] go south with unintended consequences,” Dimon said. “We’re not taking the proper actions to protect Europe from what’s going to happen to oil in the short run.”
In the most recent response, the head of JPMorgan Chase Bank scolded the Federal Reserve and said that the US Federal Reserve “waited too long and did too little” as inflation surged to a 40-year high in the past 18 months. The consumer price index (CPI), the most accurate metric for measuring inflation, was 8.3% in August; September’s figures will be made public on October 13.
What Federal Reserve say about the economic slowdown
On October 10, Lael Brainard, the vice chair of the Federal Reserve, also made a comment regarding the ongoing inflation. The Fed’s intention to keep tightening monetary policy until there is “clear evidence” of inflation slowing down was reiterated by the official. As a result of high-interest rates, Brainard also cautioned that the US economy will probably slow down even more.
“Monetary policy will be restrictive for some time to ensure that inflation moves back to target over time. It will take time for the cumulative effect of tighter monetary policy to work through the economy and to bring inflation down,” said the Vice Chair.
In an effort to combat increasing inflation, the Fed has already increased interest rates five times this year, pushing them to reach a 2% target. Dimon made his remarks after the September jobs report was released on October 7. The report revealed that businesses kept expanding their workforce quickly, unemployment decreased once again to a half-century low, and average wages increased. The stats on the unemployment rate, however, sparked worries that the Fed’s anti-inflation measures were ineffective. The likelihood that the Central Bank will continue raising borrowing costs quickly will increase the probability of a recession.
This story has been published by CoinChapter.com that covers Bitcoin, Ethereum, Stock, World and other cryptocurrency news. The information contained in this article is for only informational purposes. It does not present any investment advice nor does it serve as a substitute for individual investment.’
