US heading for recession within months, warns JPMorgan chief

The US is heading for recession within months, the chief executive of America’s biggest bank has said as he warned of “a very, very serious” mix of headwinds.

Jamie Dimon, the head of JPMorgan, said that untamed inflation, rising interest rates, and Russia’s war in Ukraine are likely to tip the US into recession by the middle of next year.

He warned that all three issues remain persistent drags on the global economy, challenging the outlook for growth in the coming months.

Mr Dimon said: “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 U.S. in some kind of recession six to nine months from now.”

The Wall Street executive’s comments come at a time of increasing market uncertainty, as the strong recent US jobs data was seen by many investors and traders as a fresh catalyst for the US Federal Reserve to take a more hawkish stance on inflation. Markets are now pricing in heftier interest rate rises in order to cool down the American economy.

Mr Dimon said the Fed “waited too long and did too little” as inflation jumped to a 40-year high over the past 18 months. However, he added that the central bank is “clearly catching up”.

Fed officials have raised rates five times so far this year to the current range of 3pc to 3.25pc, and have indicated that they plan to top 4pc by the end of this year.

Mr Dimon told CNBC at a conference held in London: “Let’s all wish him success and keep our fingers crossed that they manage to slow down the economy enough so that whatever it is, is mild – and it is possible.

“It can go from very mild to quite hard and a lot will be reliant on what happens with this war. So, I think to guess is hard, be prepared.”

Mr Dimon said he couldn’t predict how long a potential recession in the US might last, but remarked that the economy was “actually still doing well” at present and consumers were likely to be in better shape compared with the 2008 global financial crisis.

But given the disorderly financial conditions and volatility, the same could not be said for the stock market. Mr Dimon said the S&P 500, an index composed of the 500 largest US public companies, could yet fall by “another easy 20pc” from current levels, and that “the next 20pc would be much more painful than the first”.

All eyes will now turn to JPMorgan’s third-quarter financial results, which are scheduled to be released on Friday. Shares of the bank are trading at a 33pc discount year-to-date.