Jamie Dimon isn’t ruling out a recession even after forecasts for a downturn have been pared back following a US-China deal to lower tariffs.
The JPMorgan CEO said he believes a downturn is still possible, despite market volatility easing and renewed optimism over recent progress toward a trade deal between the US and China.
“I’m going to defer to economists who give it about a 50% chance,” Dimon said of the chances of a recession. “If there’s a recession, I don’t know how big it’ll big or how long it’ll last. Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point.”
His hesitation to dismiss the possibility of a recession is due to lingering uncertainties weighing on markets and the economy. He pointed to issues like geopolitical conflict, America’s growing debt load, rising interest rates, and tariffs.
He told Bloomberg at JPMorgan’s annual Global Markets Conference in Paris on Thursday that those factors have the potential to stoke inflation and slow the economy.
In a note earlier this week, analysts at JPMorgan said the risk of a US recession had fallen below 50%, but the risk is still elevated. Analysts lowered their recession forecast from 60% after the US-China trade deal framework was announced.
But uncertainties around issues like the deficit and geopolitics still remain, Dimon said. He noted that, while the administration has dialed back some of its tariffs, many of those reductions — including the reduced tariffs on China — are tied to a 90-day timeline while negotiations continue.
“I don’t expect immediate resolution, you know, to the satisfaction of everybody, in 90 days,” he said. He added that even lower tariffs are making investment decisions more difficult.
“Even at this level, you see people holding back on investment and thinking through what they want to do.”
In the meantime, Dimon expects tariffs to continue to rattle markets.
“I would expect continued volatility. I think it’s a mistake to think we can go through all the things we’re going through and the volatility itself will come down,” he added.
News of the US-China trade deal has elicited mixed reactions from Wall Street, with some forecasters cautiously raising their price targets for stocks, while others have remained focused on the risks stemming from tariffs. A handful of banks, including Goldman Sachs and Barclays, have lowered their predicted odds of a recession over the next 12 months.
