Jamie Dimon, CEO of JP Morgan, warned that an economic “hurricane” is coming. He advised, “You better brace yourself.” But we don’t know if it is a small one or if it is Superstorm Sandy.”
Jamie Dimon on the US economy and QT
Jamie Dimon, CEO of JP Morgan&Chase, Jamie Dimon warned about the looming economic hurricane Wednesday at a financial conference hosted by Alliance Bernstein Holdings.
because “this is a hurricane,” Dimon exclaimed.
However, the JPM official emphasized, noting that “it’s kind of sunny right now, things are going well, and everyone thinks the Fed can handle it.”
That hurricane is right there and coming our way. We don’t know if it’s a small one or if it’s Superstorm Sandy … but we better brace ourselves.
JPMorgan’s chief said there were “storm clouds” in May. But he has now revised his prediction.” I said there are storm clouds, they’re big storm clouds, it’s – it’s a hurricane,” he warned.
“JP Morgan is bracing itself and is going to be very conservative on its balance sheet.
Dimon is concerned about several key issues. First, the Federal Reserve is expected to withdraw its emergency bond purchase program and reduce its balance sheet, and quantitative tightening (QT) is scheduled to begin this month.
The JP Morgan boss opined.
We’ve never had a QT like this; it’s like writing a history book 50 years from now.
He said that central banks “have no choice because there is too much liquidity in the system … They need to stop speculation and remove some of the liquidity to reduce house prices and things like that,” he explained.
Dimon is also concerned about the Russia-Ukraine war and its impact on commodities like food and fuel. He warned that oil could reach $150 to $175 a barrel.
The executive stressed, warning that “the war will get worse” and have “unintended consequences.
not taking appropriate action to protect Europe from what will happen to oil in the short term.
Last month, Dimon told Bloomberg that the Federal Reserve should have moved sooner to raise interest rates. He acknowledged that the Fed is worried about starting a recession.
More people have been warning of a recession recently, including Big Short investor Michael Bree, Allianz chief economic advisor Mohamed El-Erian, and Tesla CEO Elon Musk.
BlackRock, the world’s largest asset manager with nearly $10 trillion under management, recently explained. “If they [the Fed] raise rates too much, they risk triggering a recession. If they don’t tighten enough, the risk is runaway inflation.” He stated.
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