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Jamie Dimon, Carl Icahn, and other market experts are sounding the alarm about a recession. Here’s what they’ve all said

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·7 min read
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It’s no secret that Americans are worried about a recession.

With the S&P 500 briefly falling into bear market territory on Friday, consumers are wondering if this year’s stock market downturn will spread to the broader economy, affecting their livelihoods.

Some 81% of U.S. adults now believe there will be a recession as inflation remains near a four-decade high and the Dow Jones continues to drop.

And a growing list of top economists and Wall Street investors agree. Here’s a look at who’s predicting impending economic doom and why.

Carl Icahn

Carl Icahn, who has a net worth of nearly $16 billion, was among the first Wall Street titans to warn of the increased risk of a recession.

The founder and chairman of the investing conglomerate Icahn Enterprises said in a March interview with CNBC that “a recession or even worse” could be in the cards for the U.S. economy as inflation eats away at consumers’ paychecks.

Icahn, ever the critic of corporate America, took the opportunity to blast U.S. executives, calling them unprepared for the coming economic storm.

“You have some very fine companies, some very fine CEOs, but far too many that are not up to the task that I think is going to be necessitated,” he argued.

Jamie Dimon

JPMorgan Chase CEO Jamie Dimon first warned about the significantly increased odds of a recession in April, arguing the ongoing war in Ukraine, high inflation, and the Federal Reserve’s hawkish monetary policy could combine to create serious economic pain for average Americans.

Then, in May, the CEO went a step further, arguing the Federal Reserve has only a 33% chance of ensuring a “soft landing” for the U.S. economy—in which inflation is tackled without instigating a recession.

Dimon said there’s a 66% chance that the U.S. will either end up in a mild recession or something even worse in a May 4 interview with Bloomberg.

Elon Musk

Elon Musk is even more pessimistic than most economists and Wall Street experts. The Tesla CEO said in a May 16 Twitter post the U.S. is probably already in a recession that will last anywhere from 12-to-18 months.

To Musk’s point, the technical definition of a recession involves a fall in gross domestic product (GDP) over two consecutive quarters, and in the first quarter, U.S. GDP shrank 1.4%. So when GDP data is revealed in June, economists may very well find the U.S. is already in a recession.

Jeremy Grantham

Jeremy Grantham has been warning of an impending blow-up in stocks for years. In fact, the founder of the investment company Grantham Mayo Van Otterloo said in 2010 that he thought the Federal Reserve was creating a stock market bubble. He argued stocks could "crack" in 2011 or 2012, but since then, the S&P 500 has gone on one of the most impressive runs in history.

Still, Grantham has stuck to his guns, arguing the Fed’s dovish policies of near-zero interest rates and quantitative easing (QE)—or central bank purchases of mortgage-backed securities and government bonds meant to increase the money supply and drive lending—created a “superbubble” that will eventually collapse.

In May, the investing legend argued that the Fed wouldn’t be able to undo the harm from its unsustainable monetary policies by raising interest rates this year either. Instead, the central bank is leading the U.S. toward a recession, he argues, and the fate of the economy may hinge on the housing market.

“2000 showed you can just about skate through a stock market event, but Japan and 2008 showed you can’t skate through a housing crisis,” he told Bloomberg in a May 5 interview.

Leon Cooperman

On April 5, Leon Cooperman added his name to the growing list of billionaire investors predicting a U.S. recession.

The CEO of the investment firm Omega Advisors argued that the Federal Reserve was slow to act to cool rising inflation. As a result, the central bank will be forced to raise rates aggressively to ensure price stability, thereby causing a recession.

"I think the Fed has totally missed it, and I think we have a lot of wood to chop," Cooperman told CNBC on Tuesday. "I would think the price of oil or the Fed would push us into a recession in 2023. It's not written in stone, but that would be my guess."

Deutsche Bank

Deutsche Bank, in April, became the first major investment bank to argue that the U.S. would fall into a recession by 2023.

“Two shocks in recent months, the war in Ukraine and the buildup of momentum in elevated U.S. and European inflation, have caused us to revise down our forecast for global growth significantly,” a Deutsche Bank team led by economist David Folkerts-Landau wrote. “We are now projecting a recession in the U.S.…within the next two years.”

The investment bank’s economists went on to double down on their predictions in May, arguing the U.S. will experience a “major” recession by the end of next year as the Fed moves to combat inflation with interest rate hikes.

“Given the macro starting point, my view is that the burden of proof should be on why this boom/bust cycle won’t end in a recession,” Folkerts-Landau wrote in an April 26 note.

Charlie Scharf

Wells Fargo’s CEO Charlie Scharf said this week there is “no question” the U.S. is heading for an economic downturn.

“I think it’s going to be hard to avoid some kind of recession,” Scharf said at the Wall Street Journal’s Future of Everything Festival on Tuesday.

Scharf argues, however, that strong business activity and consumer demand should help to “provide a cushion” for the U.S. economy, which could make any potential recession short-lived.

Scott Minerd

Scott Minerd, Guggenheim Partners’ chief investment officer, said this week that investors should be prepared for a “summer of pain” that “looks a lot like the collapse of the internet bubble.”

In an interview with MarketWatch on Wednesday, the CIO said his bearish view is based on the end of the free money era, and the so-called “Fed put”—or the idea that the Fed will come to markets’ rescue in the case of substantial stock market losses.

“There is no market put, and I think we’re all waking up to that fact now,” he said.

Minerd took to Twitter after the interview to add that he expects the U.S. could fall into a recession “as early as the second half of next year.”

Bill Dudley

In a March 29 Bloomberg op-ed, former New York Federal Reserve President Bill Dudley argued the Federal Reserve would be forced to increase interest rates at an unsustainable pace in order to combat inflation, despite falling growth expectations for the U.S. economy.

That makes the central bank’s chances of securing a “soft landing” nearly impossible, and unemployment will end up rising as a result, he said.

“The Fed’s application of its framework has left it behind the curve in controlling inflation. This, in turn, has made a hard landing virtually inevitable,” Dudley wrote.

Fannie Mae

Even the Federal National Mortgage Association, a.k.a Fannie Mae, has argued the U.S. is heading for a recession by the second half of next year.

However, the mortgage giant noted that a strong housing market should help to reduce the severity of the economic downturn.

A “modest recession” is the most likely outcome for the U.S. economy, Fannie Mae claims, as mortgage rates climb and the housing market cools, but an all-out collapse like what happened in 2008 is unlikely due to historically low inventory and relatively strong demand.

This story was originally featured on Fortune.com