JPMorgan Chase CEO Jamie Dimon reiterated his belief that a recession remains the most likely outcome for the U.S. economy. Dimon pointed to various uncertainties such as geopolitics, housing, and spending. Meanwhile, JPMorgan has raised the likelihood of a U.S. recession this year.
Jamie Dimon Says US Recession Still on the Horizon as JPMorgan Increases Forecast
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Jamie Dimon Maintains Recession Likely for US Economy
JPMorgan Chase CEO Jamie Dimon reiterated on Wednesday that a recession remains the most likely outcome for the U.S. economy, maintaining his view that the odds of a “soft landing” are just 35% to 40%. In an interview with CNBC, Dimon emphasized the ongoing uncertainties facing markets, saying:
There’s a lot of uncertainty out there. I’ve always pointed to geopolitics, housing, the deficits, the spending, the quantitative tightening, the elections, all these things cause some consternation in markets.
Despite holding a cautious outlook, he acknowledged that the economy has performed better than expected.
Dimon, who has consistently warned of economic challenges since 2022, added that while credit-card borrower defaults are increasing, the U.S. is not currently in a recession. However, he remains skeptical of the Federal Reserve’s ability to reduce inflation to its 2% target due to future spending pressures. The JPMorgan CEO concluded:
There’s always a large range of outcomes. I’m fully optimistic that if we have a mild recession, even a harder one, we would be okay.
Meanwhile, JPMorgan has raised its forecast for the likelihood of a U.S. recession in 2024 to 35%, reflecting growing concerns about the nation’s economic health amid recent market volatility. Bruce Kasman, JPMorgan’s chief global economist, conveyed this update to clients in a note on Wednesday, emphasizing that the revised figure is a significant increase from the bank’s midyear estimate of 25%. Kasman attributed the heightened recession risk to shifts in inflationary pressures and a cooling labor market, which have altered the economic landscape. The bank also maintained its 45% probability for a recession by the second half of 2025.
JPMorgan isn’t the only one on Wall Street raising expectations for this outcome. Goldman Sachs also increased its forecast from 15% to 25% but noted that a recession could be avoided if the Fed lowers rates or purchases bonds.
What do you think about JPMorgan Jamie Dimon’s outlook on the U.S. economy and the possibility of a recession? Let us know in the comments section below.
