'Wall Street Emperor' Dimon: "US Economic Recession Within 6-9 Months... S&P to Fall Additional 20%"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] "Europe is already in a recession. And within 6 to 9 months, the US economy will also fall into a recession."

Jamie Dimon, chairman of JP Morgan Chase, known as the "Emperor of Wall Street," said in an interview with CNBC at a conference held in London on the 10th (local time), "With very serious headwinds overlapping, both the US economy and the global economy could be driven into a recession by mid-next year."

Dimon assessed that the US economy has been doing well recently. However, he expressed pessimism about the future economic situation, saying, "We cannot avoid talking about the future." The negative factors he pointed out include soaring inflation, steeper-than-expected interest rate hikes, the unknown effects of quantitative easing (QE), and Russia's invasion of Ukraine. He noted, "These are very, very serious problems pressuring the US and the entire world."

This warning draws attention amid growing concerns about a recession as central banks around the world, including the US Federal Reserve (Fed), simultaneously raise interest rates to combat soaring inflation. The Fed, which has already implemented three consecutive giant steps (0.75 percentage point interest rate hikes), is expected to raise rates significantly again in November.

Dimon said that although US inflation has surged to the highest level in 40 years and the Fed "waited too long and did too little" regarding rate hikes, "it is clearly catching up," suggesting that the effects of tightening policies are gradually emerging. He also expressed hope that the Fed will succeed in controlling inflation and mentioned that the resulting economic slowdown could be moderate.

Regarding how long the US recession will last, he said it is unknown. However, Dimon emphasized that market volatility is certain to increase. He said, "Situations could range from very mild to very difficult, and many will be watching the impact of the Ukraine war," adding, "So it is hard to speculate. We must be prepared." This means investors should monitor and prepare for market shocks under various scenarios.

Furthermore, Dimon said that the S&P 500 index of the New York Stock Exchange could fall an additional 20% from its current level, diagnosing that "the next 20% drop will be much more painful than the first (recent 20% decline)." The S&P 500 index has fallen about 24% so far this year.

This content was produced with the assistance of AI translation services.