JP Morgan’s CEO Jamie Dimon Warns of Catastrophic Recession

• Dimon then said that there is a 20-30% chance that something much worse may occur.
• Goldman Sachs CEO David Solomon has previously issued a similar warning.

Jamie Dimon, CEO of JPMorgan Chase & Co., recently warned clients on a conference call that something much worse than a recession might be on the horizon. Dimon said that the likelihood of a recession causing an economic slowdown is just 10%. He then said that there is a 20-30% chance that something much worse may occur.

The worry was compounded when Dimon warned clients on a conference call that despite the solid status of the US economy and the healthy position of the company and consumer balance sheets, there are storm clouds looming.

Multiple Factors to Consider

Due to rising Fed rates, quantitative tightening, oil price shocks, the situation in Ukraine, and escalating U.S. relations with China, JPMorgan’s CEO now thinks a light recession has a 20% to 30% chance, while a catastrophic recession has the same chances.

A worse conclusion is possible, he says, and it would be irresponsible to focus on any one prediction about the future of the US economy. Dimon emphasized that the Federal Reserve’s objective of reducing inflation from 8% to 4% by the end of the year is very unrealistic. 

Many CEOs have already predicted the approaching recession, but their forecasts have been far less severe than Dimon’s. Goldman Sachs CEO David Solomon has previously issued a similar warning about a probable economic downturn. BlackRock CEO Larry Fink predicted the opposite, urging investors to be calm and carry on.

Giant retailers like Target and Walmart have lowered their profit projections, while other companies are laying off workers and reorganizing to survive.

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