JPMorgan CEO estimates likelihood of recession in customer call: Yahoo

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  • JPMorgan CEO Jamie Dimon spoke to some of the bank’s wealthy clients in a call on Tuesday, Yahoo reported.
  • He said there is a 20-30% chance of a “harder recession” and equal chances of “something worse”.
  • He described the current risks as “storm clouds”, an apparent deterioration in his June warning of a ‘hurricane’.

JPMorgan CEO Jamie Dimon last week estimated the likelihood of the US entering a recession, according to Yahoo Finance report released on Saturday.

Overall, Dimon said in a Tuesday client call, the economy is “strong” but he noted there are “storm clouds” on the horizon, including federal monetary policies, Russia’s invasion of Ukraine and rising oil prices. The categorization is an apparent downgrading of Dimon’s previous comments in June when he warned of a “economic hurricane”.

“Consumer balance sheets are in good shape. Businesses are in good shape, too. When you’re forecasting, you have to think differently,” he said, according to the Yahoo report. “It’s a big mistake to say ‘here’s my one-point forecast’.”

The CEO estimated the probability of a ‘soft landing’ to be around 10% and the probability of a ‘harder landing’ or a ‘mild recession’ to be closer to 20-30% . There’s also a 20-30% chance of a “harder recession” and a 20-30% chance of “something worse,” according to Dimon.

Earlier this summer, Dimon returned to the “storm cloud” metaphor he first used to describe the U.S. economy in April.

“You know, I said there are storm clouds but I’m going to change it…it’s a hurricane,” he said at Bernstein’s conference on June 1. . “You better get ready. JPMorgan is getting ready and we’re going to be very conservative with our balance sheet.”

Industry leaders like Dimon have provided various economic forecasts over the past few months as a strong labor market hits two straight quarters of contraction – leaving many pundits puzzled as to whether the United States is approaching whether or not of a recession or are already in one.

“Right now it’s kinda sunny. Things are good. Everybody thinks the Fed can handle this. This hurricane is right out there on the road coming our way,” Dimon said in June. “We just don’t know if it’s a minor or super hurricane Sandy…or Andrew or something like that.”

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