Jamie Dimon, Chief Executive Officer at JPMorgan Chase & Co, speaking at the Institute of International Finance meeting in Washington, warned the Federal Reserve may take interest rates above 4.5% due to persistent and elevated inflation, as he warned we could be in for a global recession.

He noted that for now, consumers are well positioned, in strong financial health, and spending freely. He went on, “They can probably do that for another nine months before inflation and spending catches up with them, which is why I think you’re going to see a strong economy for a while.”

However because of that, he predicted policymakers at the Federal Reserve may feel they have no choice but to raise rates above 4.5% to cool the economy sufficiently to bring inflation down to the targeted 2% rate. Dimon noted that between the quantitative tightening and the fragile energy markets, the future will be very difficult to predict precisely.

“It’s bad… those things are huge turbulence which are right in front of us – that can easily cause recession,” he added.

Earlier in the week, in an interview with CNBC, Dimon has said he believed that the S&P 500 could drop, “another easy 20%” from present levels, and that the next drop would prove to “be much more painful than the first”.

Speaking of the possibility of the Fed making a soft economic landing, he said, “I don’t think so but it might.” However, he added if there was a “tough recession you’d expect the market down another 20-30%.”

In his talks, he also talked down cryptocurrencies, saying they were good for fraud or ponzi schemes, but that they have no intrinsic value.

Photo of Jamie Dimon courtesy of Wikipedia