Jamie Dimon, CEO of JPMorgan Chase, has issued a warning about two "extraordinary" events that may have "bad outcomes" for the American economy. The executive also warned firms and investors to be ready for increasing interest rates. He said, "I don't think inflation will keep going down," and in the worst case, "a lot of people struggling."
Storm clouds over Jamie Dimon
Earlier this week, JPMorgan Chase CEO Jamie Dimon spoke with Bloomberg about his economic expectations. He said the following on the overall U.S. economy:
Consider them as storm clouds. There are two exceptional things happening right now that could lead to different results.
I'm not making any predictions about if they will hit, when they will hit, or what they will do, he continued. Last year, the JPMorgan executive first mentioned the dark clouds looming over the American economy. He warned at the time that it might actually be a hurricane. But he said earlier this year that he ought not to have used the word "hurricane."
But I'll tell you what worries me, the JPMorgan CEO said in an interview with Bloomberg on Monday. One is that the amount of fiscal spending is enormous, the highest ever during a time of peace in America and perhaps even globally, with extremely high deficits and QT we've never had. He kept talking. "I don't believe that inflation will continue to decline. It could not. As a result, rates could increase.
The largest storm cloud, according to Dimon, is geopolitical. The humanitarian catastrophe is in Ukraine. There is a conflict nearby. Over 500,000 individuals have died. It is nuclear extortion. All international connections, including commercial partnerships, between China and America would be impacted.
The JPMorgan Chase CEO continued that we don't know how these things will affect us. The economy could experience a gentle landing, a moderate recession, or a more severe recession. Obviously, there could be negative effects.
Dimon stressed: "Be prepared for higher rates and slow growth... " about his recent warning that the Federal Reserve could increase interest rates to 7%. The worst scenario from an economic standpoint is stagflation. He issued a warning:
Naturally, if it occurs, you'll observe a lot of individuals having difficulty.
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