One year ago, almost to the day, the JPMorgan Chase CEO issued a bubbly, confident forecast for the global economy going into 2022 and 2023. In his annual letter to shareholders, Dimon called the confluence of readily available vaccines, high consumer savings, and a likely big increase in public spending a “Goldilocks moment” for the U.S. economy.

“It’s a lot of money, and it’s bound to cause a booming economy,” Dimon said last April in an interview with the Wall Street Journal.

But even for Dimon, that Goldilocks moment is now beginning to look less and less like a fairy tale.

Speaking to reporters on Wednesday, Dimon said that the ongoing war in Ukraine, high inflation, and the Federal Reserve’s hawkish stance on monetary policy could combine to significantly increase the chances of a recession.

“Those are very powerful forces, and those things are going to collide at one point,” he said. “No one knows what’s going to turn out.”

Dimon still predicts a relatively strong and growing economy for the rest of 2022, but he said it is difficult to be certain of the future beyond that. The CEO compared the threat of inflation and tight monetary policy to “storm clouds on the horizon that may disappear, they may not.”

When asked if a recession was a possibility, Dimon responded: “Absolutely.”

Recession fears

Dimon held back from expressing complete certainty that a recession was in the cards, but the change in his forecast is a reminder of how fickle the economic landscape is, and how vulnerable it can be to external geopolitical forces.

Dimon joins a number of billionaires, investors, and economists warning about a potential recession, a list that has been steadily growing for weeks. 

Former Treasury Secretary Larry Summers recently wrote in a Washington Post op-ed that the current climate is eerily similar to other pre-recession periods, while last week analysts from Bank of America issued a report forecasting an increasingly inevitable “recession shock.”

And even if Dimon himself refrained from calling a recession inevitable, his bank appears to be preparing for all eventualities. In its first earnings report of 2022, released on Wednesday, JPMorgan Chase revealed it had set aside $902 million in credit reserves, ​​“largely due to higher probabilities of downside risks.”

The larger allotment to credit reserves is part of the reason why Chase’s profits had fallen 42% from a year ago. Last year was an outrageously good one for banking, so a drop is normal, but banks were also hit by unexpected factors including the war in Ukraine, supply-chain issues, and inflation. 

Dimon reiterated his bleak long-term outlook for the global economy in statements included in the earnings report.

“We remain optimistic on the economy, at least for the short term—consumer and business balance sheets as well as consumer spending remain at healthy levels—but see significant geopolitical and economic challenges ahead due to high inflation, supply-chain issues, and the war in Ukraine,” Dimon wrote.

JPMorgan Chase’s report kicked off a release of more banking quarterly calls, each posting similar earnings drops.

On Thursday, Goldman Sachs announced a 42% drop in profits, while Citigroup’s earnings had fallen by 46%.

In its earnings report, Citi announced it is setting aside $1.9 billion in potential loan losses related to the bank’s ties to Russia and “broader impact of the conflict in Ukraine on the macroeconomic environment.”