Global recession likely in mid-2023, says JPMorgan head

ANKARA

JPMorgan Chase CEO Jamie Dimon said Monday that a recession in the global and US economy is likely by mid-2023.

Inflation climbing in the US and globally, interest rates rising more than expectations, and Russia’s war in Ukraine are considered "very serious" factors that could cause a recession, according to the head of the US-based multinational investment bank and financial services company.

"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 told CNBC.

The US Federal Reserve, among many central banks around the world, has been raising interest rates aggressively to fight inflation, now hovering in many countries at the highest levels in decades.

Dimon said the Fed "waited too long and did too little" as inflation in the US climbed to its highest level in more than 40 years.

Although the Fed and its Chair Jerome Powell had repeatedly said in the final quarter of 2021 that inflation is "transitory," members of the Federal Open Market Committee (FOMC) quickly turned from a dovish tone to a hawkish stance when the war in Ukraine spiked energy and food prices and intensified inflationary pressures.

Federal Reserve Bank of Chicago head Charles Evans said earlier Monday that the Fed could bring inflation down "relatively quickly" while also avoiding a recession, called a soft landing.

But Dimon said he is uncertain how long a US recession might last.

“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," he said.