Jamie Dimon cautions investors about 'economic hurricane' and he is not alone

Quantitative tightening (QT) — The Fed plans to sell securities to suck the liquidity out of the system

Impact of Russia-Ukraine war on commodities

The US central bank is scheduled to begin QT this month, and ramp it up to $95 billion a month in reduced bond holdings.

"You gotta brace yourself. We at JPMorgan are bracing ourselves, and we're going to be very conservative in our balance sheet," Dimon said.

The Fed and major central banks around the globe — including the RBI — have started to hike pandemic-era interest rates to tackle elevated consumer prices, at a time when investors are assessing the prospect of recession. Economists, however, believe there is no risk of recession in India.

Currently, inflation in the US — the world's largest economy — is hovering around levels more than three times the Fed's goal of 2 percent. It faces the Herculean task of bringing down the cost of living for the public without causing a blow to the system.

Dimon is not the only one worried about slowing growth.

Gary Schlossberg, a global strategist at Wells Fargo Investment Institute, expects a difficult period for the markets, as the US and European central banks "will be tested by inflation, which will remain elevated over the next several months", he told CNBC-TV18.

"We are beginning to see cracks, particularly here in the US, in a reasonably strong growth rate, housing activity beginning to fade, capital spending peaking to some extent and even the consumer sector... Through it all, the Fed and the ECB are going to remain focused on inflation," he said.

"Nothing moves in a straight line. We could see a periods of strength and reaction to some economic data... We think that the economy's growth rate will wind down during much of the second half of the year. We could even see the beginnings of a recession we believe by the end of 2022 or early 2023. And until the market gets better clarity on the bottom to this slowdown, we think the bias is going to be for weaker market," he said.

Many economists are predicting aggressive rate hikes in the coming months despite the US central bank hinting at softer-than-expected moves recently.

Steven Englander, global head of G10 FX Research and North America Macro Strategy at Standard Chartered, expects the US central bank to hike the key lending rates to up to 275 basis points by the end of the year.

Dimon also believes that central banks, commercial banks and forex trading firms — a triad that was the major purchaser of government bonds to tackle the 2008 financial crisis — won’t have the capacity to soak up as much liquidity this time.

Major financial markets around the globe are in correction territory. The Dow Jones — one of the three main Wall Street benchmarks — has dropped more than 11 percent from its recent peak, a trend mirrored by the Nifty50.

The most important issue for the markets in 2022 remains whether and when the Fed will adjust its language, which would, in turn, be a sign of a change in policy "just as the dropping of the word 'transitory' was in late November 2021", Christopher Wood, Global Head of Equity Strategy at Jefferies, wrote in his "GREED & fear" report — his weekly notes to investors — last month.

"Such a development will happen at some point this year, with the timing dictated as much by market action as by the data. Still if GREED & fear had to guess at the timing it would be late third quarter given the growing proximity of the mid-term elections by then," he said.