The economic hurricane that JPMorgan CEO Jamie Dimon warned about in June may be less intense than originally feared, according to a new report from the bank.
On Wednesday, JPMorgan economists Michael Feroli and Daniel Silver wrote that they see the U.S. in a “mild recession” in the second half 2023 as the Fed looks to complete its mission to flatten inflation.
“We’re effectively looking for a Category 1 economic hurricane,” the economists wrote. “What are the risks? Weakness could build on itself, requiring a larger response by the Fed to get the economy back on track.”
The note comes on the heels of a better-than-expected Consumer Price Index (CPI) report, which showed that there are signs that prices are beginning to moderate amid persistently-high inflation.
The market rallied following the report as investors wondered how the positive inflation news would alter the Fed’s course. Central bank officials, for their part, reiterated that more interest rate hikes would be need to…