Earlier in June, JPMorgan Chase CEO Jamie Dimon warned investors to brace for an economic “hurricane” and that there were “storm clouds” on the horizon as volatility and wild stocks battered financial markets this month. Wells Fargo chief Charlie Scharf sang a similar tune in May when he said that there was “no question” the U.S. was headed for an imminent economic recession of some form.

Speaking at a Morgan Stanley investors’ panel on Monday, Gorman threw his hat in the ring by joining the chorus of recession warnings, expressing concern that last week’s worse-than-expected inflation reading is pushing the chances of a recession upward, but also urging Americans not to panic too much.

“It’s possible we will go into a recession obviously. There are 50-50 odds now,” Gorman said.

It’s an uptick from Gorman’s past evaluations of the likelihood of a recession. As recently as the end of May, the CEO predicted a less than 50% chance of a contraction occurring.

The revised expectations come as market watchers grow skittish in June over just how far the Federal Reserve will be willing to go to bring down inflation. Fed leaders will meet on Tuesday to discuss how high the next interest rate hike from the central bank will be, and some Wall Street traders are concerned rates could rise much higher than 75 basis points, despite Fed Chair Jerome Powell’s assertions last month that such a rate hike was not being “actively considered.”

The latest inflation numbers and uncertainty over the Fed’s response has sent markets spinning, and all three major stock indexes tumbled on Monday. 

But despite the growing chances of a recession, Gorman also identified one reason that leads him to believe a severe contraction is unlikely: America is still flush with cash.

“Consumer balance sheets are very strong; corporate balance sheets are very strong; there has been enormous refinancing from banking,” Gorman said. “The consumer is in much better shape, and employed, importantly.”

And even if the U.S. does go into a recession, Gorman predicted it will be fairly short. 

“We’re unlikely at this stage to go into a deep or long recession,” he said.

Despite inflation, consumer spending has remained high over the past few months, suggesting that the large pandemic-era savings most Americans gained over the past few years is helping the economy stay afloat right now. Other banks including Goldman Sachs and economists like Harvard’s Jason Furman have expressed similar confidence that high consumer spending will be enough to ensure a mild recession, and despite the market frenziness, Gorman says he is confident the Fed can get the situation under control.

“I am totally relaxed about it,” he said. “I don’t think we’re falling into a massive hole over the next few years. I think the Fed will get ahold of inflation.”

But while a severe recession may be unlikely, the road ahead will still be “bumpy” for many consumers, Gorman says, and suggested that the Fed may have been wrong in its initial approach to dealing with inflation.

Gorman highlighted the Federal Reserve’s assertive stance on monetary policy, which has become increasingly hawkish over the past few months, as a key driver of an eventual recession, noting that the Fed’s strategy to delay action on inflation may have backfired.

“I thought the Fed should have raised rates a long time ago,” Gorman said. 

Last year, even as prices started rising, the Federal Reserve employed a “wait-and-see” approach to tackling inflation, believing prices to only be on a “transitory” upward trajectory.

But with unexpected geopolitical factors such as the war in Ukraine sending prices to new highs, inflation and a rapidly changing monetary policy regime have suddenly become much less predictable.

“We’re in sort of a Brave New World right now,” Gorman said, referencing the 1932 dystopian science fiction epic that depicts a vastly different and obscure future version of society. “I don’t think there’s anyone in this room who can accurately predict where inflation is going to be a year from now.”