Dimon is concerned that the Fed may raise rates even higher than their current two-decade peak instead of lowering them.

He said not only would that send shock waves through the Street, but the economy generally would not be prepared for this decision.

“When we look at risk and rates we don’t always look guessing what the future is, [we are] kind of looking at a range of outcomes,” Dimon told CNBC during the J.P. Morgan Global China Summit in Shanghai.

“Do I think that rates can go up a little bit? Yes I do. And if they do is the world prepared for it? Not really.”

It’s a warning that flies in the face of economists’ consensus.

Earlier this month, Reuters updated a running survey of economists who were asked when they expected to see the Fed begin to cut rates. Almost two-thirds of the economists surveyed, 70 of 108, believe the first reduction will come in September, to a 5.00% to 5.25% range.

These expectations have shifted from a more optimistic outlook just a month earlier, when 26 economists said they were expecting a July cut, and four said they were expecting a reduction in June. By May, 11 were holding out for a July cut, but none believed a downward revision would happen in June.

Sticky inflation

While Dimon’s take may be a departure from the consensus—with the 68-year-old finance veteran saying bankers have been “lulled” into a false sense of security—his reasoning is familiar.

“Could inflation be stickier than people think? I think the odds are higher than other people think,” he explained. “Mostly because of the huge amount of fiscal and monetary stimulus. It’s still in the system; it’s still maybe driving some of this liquidity you see, markets going up, prices of certain assets and stuff like that.

“So I’m just on the cautious side.”

Indeed, inflation may not be as compliant as the Fed may have hoped. The latest data from the U.S. Bureau of Labor Statistics for April found that the consumer price index increased 0.3% on a seasonally adjusted basis, having risen 0.4% in March.

The all-items index rose 3.4% for the 12 months ended in April, however, which was a slighter increase as compared with 3.5%, for the 12 months ended in March.

While some factors are working in the Fed’s favor—the Bureau of Labor Statistics reported earlier this month that U.S. employers added only 175,000 jobs in April—Dimon isn’t the first to caution that the Fed’s inflation fight may get worse before it gets better.

Last year Citigroup CEO Jane Fraser—who is among the highest-ranking on Fortune’s Most Powerful Women list—explained that if history is a guide, the second half of reining in inflation is always the more difficult than achieving the initial drop.

Back in October, she said that “all the numbers” suggested the economy was in for a soft landing, but she added that the second half of an economic scheme is the “tougher half.”

Dimon—who recently shocked the market by saying he may be looking to retire in the next five years—added that stubborn inflation may lead to what he sees as the “worst” outcome for the U.S.: stagflation.

He added: “I look at the range of outcomes, and again, the worst outcome for all of us is what you call stagflation, higher rates, recession. That means corporate profits will go down, and we’ll get through all of that. I mean, the world has survived that, but I just think the odds have been higher than other people think.”