JPMorgan Chase CEO Jamie Dimon believes America’s battle with inflation isn’t over yet, and nasty consequences are on the horizon.

In an interview with Bloomberg, Dimon said, “There are a lot of inflationary forces in front of us,” adding that “The underlying inflation may not go away the way people expect it to.”

The problem is that the Fed can’t simply raise interest rates again without overstressing an already deeply indebted economy.

“If you have higher rates and—God forbid—stagflation, you will see stress in real estate and leveraged companies, and private credit,” Dimon explained.

Stagflation is a sort of taboo word in U.S. economic circles. The country experienced a stagflation scare in the 1970s when higher rates were accompanied by rising inflation and elevated unemployment.

Although the Fed has dismissed the possibility of stagflation taking root, inflation remains rampant in the economy.

Despite 11 interest rate hikes, the Consumer Price Index (CPI) has been above 3% for three years, sitting much higher than the Fed’s 2% target. Worse yet, inflation accelerated in the first quarter, even as economic growth was cut in half.

Clearly, Dimon is on to something.

Soft landing isn’t guaranteed

With Fed Chair Jerome Powell admitting that progress on inflation “is not assured,” economists are questioning whether the central bank can deliver a soft landing for the economy.

“I don’t know what about it is going to be soft, and I don’t know if it’s going to be a landing at all,” said Nancy Kimelman, an economics professor at Northeastern.

Citigroup’s chief economist, Andrew Hollenhorst, recently told CNBC to prepare for a “hard landing,” which opens up the possibility of a recession.

In Hollenhorst’s view, the softening has already begun, which “tends to snowball and end up in something that looks more like a hard landing,” which is exactly the scenario the Fed is trying to dodge.

Other signs of a weakening economy also emerged last week, with the Conference Board’s leading economic index (LEI) recording another drop in April.

The index, which predicts turning points in the business cycle and overall economy, has decreased in back-to-back months and is down 1.9% since October.

“Another decline in the U.S. LEI confirms that softer economic conditions lay ahead,” said Conference Board senior manager Justyna Zabinska-La Monica.

The indicator showed a decline in consumers’ outlook on the economy, driven largely by higher interest rates, elevated household debt, and depleted savings.