JPMorgan Chase & Co JPM.N Chief Executive Jamie Dimon said the United States and the world economy could enter a recession as early as the middle of next year , CNBC reported on Monday. The assertions coincide with the estimates of the president of the World Bank and the director of the IMF, who see a recession very likely in 2023.
Rampant inflation , big interest rate hikes, the Russian invasion of Ukraine and the unknown effects of Federal Reserve policies are some of the indicators of a possible recession, he said in an interview with the business news channel.
“These are very, very serious things that I think are likely to push the United States and the world – I mean, Europe is already in a recession – and are likely to put the United States in some kind of recession six or nine months from now.” Dimond said.
His comments come at a time when the big US banks are preparing to present their third-quarter results from Friday.
Wall Street’s benchmark S&P 500 .SPX index has lost nearly 24% so far this year, with all three major US indices trading in bear market territory.
Dimon said the S&P 500 could drop “another easy 20%” from current levels , with the next 20% drop likely “going to be a lot more painful than the first,” according to CNBC reporting.
Earlier this year, Dimon called on investors to prepare for an economic “hurricane ,” after JPMorgan, the largest US investment bank, suspended share buybacks in July after failing to meet Wall Street’s quarterly expectations. Street.
Global markets hit 2-year lows
Global stocks hit their lowest levels in nearly two years again on Tuesday, with sentiment weighed down by concerns about rapidly rising interest rates, the escalation of the Ukraine war and the intensification of measures against the pandemic. in China.
In June, Goldman Sachs had forecast a 30% chance that the US economy would enter a recession over the next year, while Morgan Stanley economists put the odds of a recession over the next 12 months at around 35%.
Recession in sight for the World Bank and the IMF
World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva also warned Monday of the growing risk of a global recession, saying inflation remained a problem following Russia’s invasion of Ukraine.
“There is a real risk and danger of a global recession next year ,” Malpass said, in dialogue with Georgieva, at the start of the annual meetings of both institutions.
The two authorities cited slowing growth in advanced economies and currency depreciation in many developing countries.
Georgieva said the IMF sees “a significant problem” in China, the world’s second-largest economy, where volatility was weighing on growth.
With information from Reuters.