Recently, global stock markets have been experiencing a turbulent ride, prompting speculation about whether the markets have emerged from the gloom. Jamie Dimon, the CEO of JPMorgan Chase, stated on Wednesday that the recent market turmoil and partial rebound were due to investors’ “overreaction”. He urged people to remain calm in the face of this week’s market fluctuations and still believes that the United States is more likely to experience an economic downturn.
Dimon, in an interview with CNBC on Wednesday, said, “The market is experiencing intense volatility. I believe people are overreacting a bit to the day-to-day market fluctuations. Sometimes it’s for valid reasons, other times it’s almost unfounded.”
On Wednesday, the Dow Jones surged in early trading but turned negative in the afternoon. By the close of trading, the Dow fell 234 points, the Nasdaq Composite Index dropped 171 points, a decline of 1%. The S&P 500 index also dropped 40 points. On Monday, due to concerns about a possible economic downturn in the United States, the Dow plunged over 1000 points.
On Tuesday, the three major U.S. stock indexes recouped some of their losses from the previous day. The Dow rose 294 points or 0.8%, the S&P 500 index increased by 1%, and the Nasdaq Composite Index rose by 1%.
Dimon stated that despite recent market turbulence and some negative data, his outlook for a potential economic downturn is roughly the same as it was about six months ago. He still believes that the probability of a “soft landing” for the U.S. economy is around 35% to 40%.
Dimon had previously indicated in February that the market was overly optimistic about the prospects of avoiding an economic downturn in the U.S., with a predicted 70% to 80% chance of a successful “soft landing”, whereas he saw only half that probability of success.
Leading a team of economists at JPMorgan Chase, including Bruce Kasman, they projected in a report to clients that by the end of this year, there is a 35% chance of the U.S. economy falling into a recession, higher than the 25% forecasted in early July. By the second half of 2025, they anticipate the likelihood of an economic downturn remaining the same at 45%.
Dimon also expressed doubt about the Federal Reserve’s ability to achieve its target of lowering inflation to 2%, as he anticipates increased investment in green economy and military initiatives in the U.S. He mentioned that geopolitical tensions and quantitative tightening (QT) continue to introduce a lot of uncertainty to the economy.
Dimon said, “There is currently a lot of uncertainty. I have always pointed out that geopolitics, housing, deficits, spending, quantitative tightening (QT), elections – all of these are uncertainties for the market.”
Dimon, the CEO of America’s largest bank, has been warning about an economic “storm” since 2022. On Wednesday, he stated that although the default rates for credit card borrowers are rising, the U.S. has not yet entered a recession.
Dimon commented, “I am entirely optimistic that if there is a mild economic downturn, even a more severe one, we will be okay. Of course, I have great sympathy for those who lose their jobs. People do not want the economy to crash land.”
In the interview, Dimon reiterated his plan to retire from his current position within five years, but he mentioned that he could continue serving as the bank’s chairman for a few more years if the board requires his continued leadership.