Starwood Capital CEO Barry Sternlicht said Tuesday that a severe economic downturn is inevitable. “I think we’re going into a serious recession,” Sternlicht said on CNBC’s ” Squawk Box .” Recession fears have only worsened recently as closures of Silicon Valley Bank and Signature Bank , and capital issues at Credit Suisse and First Republic , raised concerns about the state of the banking industry. Jamie Dimon, longtime JPMorgan Chase CEO, said in his annual letter to shareholders that the banking crisis is not over and will cause “repercussions for years to come. ” However, Dimon believes that the U.S. might be able to skirt a recession. While an inverted Treasury yield curve has been a reliable recession indicator for decades, it may not be true this time because of the enormous effect of quantitative tightening, Dimon said. He believes that the inversion is still driven by prior quantitative easing and not the dramatic change in supply and demand. Sternlicht disagrees with Dimon’s call as he believes the government has created a massive deficit problem and interest rates would only go up because of it. The “deficit will grow, we’ll have to print more paper that should force rates up, which would make the economy weaken further,” Sternlicht said. Sternlicht previously said he and his colleagues looked at six regional banks and studied their mark-to-market losses on assets. Starwood determined all of them are effectively insolvent. “The credit markets are smart. They know that this cannot last and we have the very low consumer confidence, very low savings rates, very low CEO confidence, and a series of layoffs coming through the service industries,” Sternlicht said.