Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., described the challenges facing the U.S. economy akin to an "hurricane" down the road and urged the Federal Reserve to take forceful measures to avoid tipping the world's biggest economy into a recession.

Signs of Superstorm Sandy?

Dimon's comments come a day after President Jo Biden met with Federal Reserve Chair Jerome Powell to discuss inflation, which is hovering at 40-year highs.

"It's a hurricane," Dimon told a banking conference, adding that the current situation is unprecedented. "Right now, it's kind of sunny, things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don't know if it's a minor one or Superstorm Sandy," he added.

The Fed is under pressure to decisively make a dent in an inflation rate that is running at more than three times its 2% goal and has caused a jump in the cost of living for Americans. It faces a difficult task in dampening demand enough to curb inflation while not causing a recession.

"The Fed has to meet this now with raising rates and QT (quantitative tightening). In my view, they have to do QT. They do not have a choice because there's so much liquidity in the system," Dimon said.

Major central banks, already plotting interest rate hikes in a fight against inflation, are also preparing a common pullback from key financial markets in a first-ever round of global quantitative tightening expected to restrict credit and add stress to an already-slowing world economy.

The inflation battle has become the focal point of President Joe Biden's June agenda amidst his sagging opinion polls and before November's congressional election.

Wells Fargo & Co. CEO warned that the Federal Reserve would find it "extremely difficult" to manage a soft landing of the economy as the central bank seeks to douse the inflation fire with interest rate hikes.

The CEO of the fourth-largest U.S. lender also said that Wells Fargo is seeing a direct impact from inflation on consumers' spending, particularly on fuel and food.

"The scenario of a soft landing is ... extremely difficult to achieve in the environment that we're in today," Wells Fargo Chief Executive Officer, Charlie Scharf, said at the conference.

Short Recession Tolerable

"The economy does need to slow in order to tame inflation. If there is a short recession, that's not all that deep... there will be some pain as you go through it, overall, everyone will be just fine coming out of it," he added.

Scharf said while the overall consumer spending is strong, growth is slowing.

"Corporations are still spending, where they can they're increasing inventories ... we do expect the consumer and ultimately businesses to weaken, which is part of what the Fed is trying to engineer but hopefully in a constructive way," he added.

Recent Fed reports and surveys reported households on average in a strong financial position, with working families doing well, and unemployment at levels more akin to the boom years of the 1950s and 1960s. Wages for many lower-skilled occupations are rising, and bank accounts, on average, are still flush with cash from coronavirus support programs.

But confidence has waned, and in a recent Reuters/Ipsos poll the economy topped respondents' list of concerns.

"I don't think our crystal ball relative to the macro later this year, 2023, 2024 is necessarily any better than others. Clearly, we're going to see with the Fed actions different impacts in different businesses," GE CEO Larry Culp, told the same conference.