“The world is pricing in a tender touchdown, at in all probability 70-80%,” the JPMorgan Chase & Co. chief government officer mentioned by way of video hyperlink on the Australian Monetary Evaluation Enterprise Summit in Sydney on Tuesday. “I feel the prospect of a tender touchdown within the subsequent 12 months or two is half that. The worst case could be stagflation.”

Dimon mentioned financial indicators have been distorted by Covid-19 and he takes them with “a grain of salt,” saying the Fed ought to watch for extra readability earlier than reducing rates of interest.

“They’ll all the time reduce rapidly and dramatically. Their credibility is a bit at stake right here,” he mentioned. “Unemployment in the US could be very low in the intervening time, wages proceed to go up.”

Dimon mentioned whereas the US economic system was “type of booming” at present, the danger of a recession remained.

The feedback strike a barely much less optimistic tone from the highest banker, who has lately painted a sanguine outlook for world markets — a pointy divergence from his views lower than two years in the past when central banks first began tightening rates of interest. Dimon made headlines for warning in 2022 {that a} “hurricane” was about to hit the US economic system.

Learn Extra: Dimon Says CRE Will ‘Muddle Through’ as Long as No Recession

Federal Reserve Chair Jerome Powell final week urged the central financial institution is getting close to the arrogance it wants to start out reducing rates of interest.

“We’re ready to turn out to be extra assured that inflation is transferring sustainably at 2%,” Powell mentioned Thursday whereas answering questions from the Senate Banking Committee. “Once we do get that confidence — and we’re not removed from it — it’ll be acceptable to start to dial again the extent of restriction.”