JPMorgan chief: US to fall into recession within 6-9 months

By Al Mayadeen English
Source: Agencies
11 Oct 2022 13:41
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The Feds aggressively hiking interest rates doesn't seem to work.

JP Morgan CEO Jamie Dimon delivers a speech during the inauguration of the new French headquarters of JP Morgan bank in Paris, France June 29, 2021. (Reuters)

The chief executive of JPMorgan, Jamie Dimon, has predicted that the US economy will fall into recession within 6 to 9 months, citing a number of factors leading to this.

In an interview with CNBC in London, Dimon posited that the Federal Reserve's strategy for dealing with inflation - which is running away from it - in addition to unknown effects of quantitative easing and consequences of the Ukraine war are all exacerbating the situation.

“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,” Dimon said.

It is almost impossible, according to Dimon, to predict whether the coming recession will be severe and long, short, or moderate.

Dimon attempted to contain fears, saying that US consumers are perhaps in better shape to deal with a recession than the 2008 global financial crisis.

See more: Americans concerned about their everyday purchases

US Treasury: Inflation causing great economic insecurity in US

Secretary of the US Treasury Janet Yellen remarked that inflation at home is causing a great sense of economic insecurity and that she hopes it does not become endemic - despite that experts have been warning that inflation may become rooted in the US economy.

"I think inflation has been running at unacceptably high rates, it is a huge issue for every American household, it's leading to a great sense of economic insecurity for Americans, and we don't want to see it become endemic," Yellen said in an event hosted by The Atlantic.

Yellen said that she predicts inflation will come down next year, in addition to the country being vulnerable to supply chain shock which has come as a result of the war in Ukraine.

In addition, Yellen said the Federal Reserve may not meet its 2% target for inflation next year, despite the interest rate hikes that the Fed has been implementing.

"It may not happen by 2023 but I have full confidence in the Fed’s ability to bring it down," she said.

It is worth noting that the economic situation which is affecting the financial standpoints of American families and businesses is burdening US President Joe Biden's popularity, which will affect his chances of winning the midterm congressional elections which will take place in early November.