America's most powerful banker warns US faces worse than recession

America's most powerful banker has warned that the US economy faces a greater threat than a recession.

JPMorgan Chase CEO Jamie Dimon has warned that the threat of stagflation could still strike the US economy. 

Stagflation is the combination of economic stag-nation and in-flation. Prices continue to soar at the same time as unemployment rises and economic growth slows - a triple whammy of problems. 

Economists consider stagflation, last seen in the US in the 1970s, to be worse than a recession. 

It would send stocks down, hitting 401(K)s and other retirement savings. 

In contrast during a recession, unemployment increases and the economy shrinks - but the silver lining is that there is little or no inflation. 

'There's a chance that (we'll) have stagflation (in the US),' Dimon told Bloomberg on Thursday. 

Dimon said while he was not making a certain prediction, 'we have to be prepared for something like that.' 

'Global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary,' he said during the TV interview.  

At JPMorgan's annual investor's day on Monday, Dimon said that the chances of stagflation returning are probably twice that of what others have projected.

The billionaire also said that markets were showing an 'extraordinary amount of complacency' in the face of the economic threats of Trump's tariffs.

Dimon said the full effect of Trump's aggressive trade policies have yet to be felt. 

Dimon is not alone, with a host of major economists also warning that stagflation could return. 

'Directionally, it is stagflation,' Mark Zandi, chief economist at Moody's Analytics, warned back in March.

'It's higher inflation and weaker economic growth that is the result of policy - tariff policy and immigration policy.'

This is not the first time Dimon has warned that the US economy is in peril in recent months. 

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Last month the banker predicted that the economy was likely headed towards a recession.  

'Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,' Dimon told investors. 

Dimon has run JPMorgan Chase, the largest US bank, for 19 years and is one of the most prominent voices in corporate America.  

The bank, which has prominent retail as well as investment arms, has become the world's biggest and most powerful bank with $4 trillion in assets under Dimon. 

The banker has a net worth of $2.5 billion, according to Forbes.