NEW YORK (Reuters) – Wall Street’s biggest banks sounded cautious on economic headwinds ahead, reducing risk in certain areas as they assess the likelihood and severity of recession, with JPMorgan’s Jamie Dimon likening the environment to a coming “storm.”

Banks are facing a tough economic backdrop with sky-high inflation worrying consumers, under-pressure markets hurting investment banking and inverted portions of the U.S. Treasury yield curve adding challenges to generating income.

“The environment – if I had to use one word to describe it, it would be complicated,” said Morgan Stanley Chief Executive James Gorman, citing the conflict in Ukraine, interest rate increases, economic threats and other factors.

“I think it’s important to say, though, it is not 2008 complicated. This is a different type of financial stress in the system. And frankly, the banking sector is much stronger than it was going into the last time.”

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