The head of one of the largest banks in the world, JPMorgan Chase Jamie Dimon said that amid a severe recession, the U.S. stock market will fall by another 20-30%, writes Bloomberg. Why is the U.S. market going down?

Interest rates in the U.S. are likely to rise more than previously thought, said the head of JPMorgan. The Fed will have to raise rates above the 4-4.5% range expected by many economists because of a run-up in inflation to its highest level in decades, he explained.

The U.S. economy is unlikely to have a soft landing, Dimon said.

“I don’t know if it could be a soft landing for the economy. I don’t think so, but it’s not out of the question,” the JPMorgan chief said at an industry conference in Washington.

Since the beginning of the year, the S&P500 index has fallen by about 23%. “In a tough recession, we can expect the U.S. stock market decline to be another 20 to 30 percent,” Dimon predicted.

In September, the U.S. core inflation rate (which excludes food and energy prices) jumped to a 40-year high of 6.6% from a year ago. The value was much higher than in August, when the index reached 6.3%. The index exceeded market expectations. Meanwhile, the overall U.S. consumer price index (CPI) was up 8.2% year-over-year, also above expectations.

U.S. inflation remains high despite five Fed rate hikes this year, including three consecutive hikes of 75 bps. To rein in rising prices, the U.S. Fed has raised interest rates this year by 300 bps. — to 3-3.25%, the highest since 2008. The next Fed meeting is scheduled for November 1-2.

Earlier, we reported that European stock markets declined for the sixth consecutive session.