Jamie Dimon Warns “Of Course There Is A Recession Ahead”

JP Morgan CEO Jamie Dimon’s recession forecasts are growing increasingly vague.

After Tuesday morning’s barrage of bank earnings, which sent JPM shares higher as the bank reported record quarterly revenue, the CEO said during a conference call with reporters. Dimon said that geopolitical tensions (i.e. the US-China trade war) have not only discouraged economists, but American consumers and businesses, too.

“It does look like geopolitics, particularly around China and trade, are reducing business confidence and business capital expenditure,” Dimon said during the call.

During trade negotiations late last week in Washington, the Chinese delegation reportedly offered to drop restrictions prohibiting foreign financial firms from owning a controlling stake in mainland financial-services companies. However, BBG reported Tuesday morning that Beijing wants Washington to drop all trade-war tariffs (Beijing had promised to spend $50 billion a year on US agricultural products) before it moves forward with any of it. JPM has agreed to buy a controlling stake in China International Fund Management (CIFM), a Chinese asset management firm.

Jamie Dimon

Circling back to the call with reporters following Tuesday’s earnings report, Dimon said that while he expects a recession to arrive at some point during the not-too-distant future, the exact timing remains a mystery.

Almost exactly one month ago, the legendary bank CEO said his gut told him that a recession is “not imminent.”

“Of course there’s a recession ahead, but whether it’s soon, we don’t know,” Dimon said. “Housing and wages look strong. It looks like we’re still growing, but we’ll see…”

For what it’s worth, the NY Fed’s proprietary gauge is presently indicating a 40% chance of a recession breaking out during the upcoming 12 months.

The ‘Phase 1’ deal between China and the US has yet to be written, even as President Trump and Vice Premier Liu He insisted on Friday that it had been finalized as a ‘handshake’ agreement.