JPMorgan Chase CEO 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

JPMorgan Chase CEO Jamie Dimon reiterated his belief that a recession is the most likely scenario for the U.S. economy in an interview with CNBC on Wednesday. While acknowledging that the economy has performed better than anticipated, Dimon pointed to various uncertainties continuing to plague markets, including geopolitics, housing, deficits, spending, and quantitative tightening.

Despite holding a cautious outlook, Dimon acknowledged that the economy has performed better than expected.

“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,” Dimon said, adding:

“I’m amazed at how well the economy has done. I thought it would be weaker last year. I thought inflation would come down faster. I thought credit card [borrower] defaults would go up faster. They’re going up, but not as fast as I thought. So we’re not in a recession.”

Dimon, who has consistently warned of economic challenges since 2022, further stated that he remains skeptical of the Federal Reserve’s ability to reduce inflation to its 2% target due to future spending pressures.

“I don’t see how they get to 2% without mild or maybe even harder recession,” Dimon noted. “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.

“We now think that a downturn in 2024 is more likely (35%) than our previous mid-year assessment (25%),” Kasman wrote in the note to clients, obtained by CNBC. “This reflects our view that while inflationary pressures are likely to ease further this year, the lagged impact of past rate hikes and a cooling labor market will increasingly weigh on the economy.”

“We continue to see a 45% probability of a recession by 2H 2025, broadly in line with our prior assessment,” he added.

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.

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