Down Angle Symbol A symbol in the form of an angle pointing downwards. Chase CEO Jamie Dimon and billionaire hedge fund founder Ray Dalio have predicted a US recession the likes of which has never happened before. Eugene Gologursky/Fast Company and Win McNamee/Getty Images
- Well-known investors and billionaires have warned of an impending recession in recent years.
- But the US economy is performing better than expected, with good jobs reports and lower inflation.
- Jamie Dimon and Ray Dalio told WSJ that the U.S. economy's performance surprised them.
Chase CEO Jamie Dimon and billionaire hedge fund founder Ray Dalio appear to be hedging their gloomy forecasts for the U.S. economy after warning for some time that a recession was imminent.
In September 2022, Dalio told MarketWatch that the U.S. will likely slip into a recession in 2023 or 2024 as stocks and bonds suffer.
Around the same time, Dimon told CNBC that while the U.S. economy is “actually still doing well,” he believes runaway inflation, high interest rates and the war in Ukraine could cause the U.S. to… “Six to nine months will be in recession.”
Many high-profile investors, billionaires and economists expected a painful economic storm in the US, but the economy has so far exceeded expectations despite strong jobs reports, cooling inflation and strong consumer spending.
“I was pessimistic about the economy,” Dalio told The Wall Street Journal. “I have got it wrong.”
Dalio told The Journal that he expects the economy to slow due to high interest rates, which he said is “squeezing private sector demand and asset prices.”
Dimon told the newspaper that he “would have thought some of the fiscal stimulus would have worn off by now.”
Due to the strong economic performance in the USA, some experts assume that the country is on the way to a “soft landing”. But not all economists are convinced of this rosy outlook.
Citi's chief U.S. economist Andrew Hollenhorst told CNBC in February that the U.S. is headed toward a recession by mid-2024, citing reduced worker hours and inflation, which he said is still too high.
Economist David Rosenberg also questioned the prevailing narrative about the US's “roaring economy”. The president of Rosenberg Research also pointed to the reduced number of hours worked, but also mentioned other warning indicators, including the lower number of new homes built in January and falling industrial production and retail sales.
In a recent interview with CNBC's Fast Money Halftime Report, Dimon also expressed some pessimism, stating, “The markets change their minds pretty quickly.”
“Remember that you felt great in 1972 too. And before the crash you felt great, and then things changed,” he said.
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