JPMorgan Chase CEO Jamie Dimon has warned that one thing unhealthy might occur within the U.S. financial system. “I’m not trying to scare people. I’m more in the category that something could go wrong,” he harassed. “A lot of things out there are dangerous and inflationary. Be prepared … Interest rates may go up and that might lead to recession.”
Jamie Dimon Says ‘Be Prepared’
The CEO of JPMorgan Chase, Jamie Dimon, issued a number of warnings relating to the U.S. financial system this week on the 2023 New York Times Dealbook Summit in New York and the Global Investment Summit organized by British Prime Minister Rishi Sunak in London.
Elaborating on his current warning of “the most dangerous time the world has seen in many years,” Dimon stated on the Dealbook Summit on Wednesday: “If you look at history and you open a newspaper of any month, any year, of course, there’s always tough stuff going on — wars, depressions, recessions….” He defined that the present scenario, together with the warfare in Ukraine, the large humanitarian disaster, and the nuclear blackmail, is affecting all, together with oil and gasoline, migration, meals prices, in addition to worldwide navy and financial relationships. “That’s pretty tough and that’s before the terrorist attack in Israel,” Dimon opined.
Noting that these occasions are “dangerous,” the JPMorgan govt emphasised: “If you look at the history of battles like this, they’re unpredictable. You don’t know the full effect.” He continued:
I have a look at quite a lot of issues on the market … each harmful and inflationary. So I simply say: be ready. … The charges might go up — each the brief charge and the 10-year charge, and be ready which may result in recession.
Commenting on the present state of the financial system, Dimon described: “When people look at the current economy and things are going good … We’ve had a little bit of drugs injected directly into our system called ‘fiscal stimulation,’ the largest we’ve ever had in peacetime … But they are drugs running through the system, and they create this kind of sugar high, and we’re in a sugar high.”
The JPMorgan boss additional shared: “Corporate profits are up because people are spending a lot of money. Where do they get the money? The government gave it to them. Well, of course, profits are up … So, I’m quite cautious about the economy.” Dimon additional asserted that the world isn’t prepared for a 7% rate of interest.
Dimon Anticipates ‘Something Could Go Wrong’
At the Global Investment Summit organized by Prime Minister Sunak on Tuesday, Dimon warned that one thing economically unhealthy might occur. Cautioning that the world is now dealing with a “dangerous cocktail” of dangers that might show “explosive” for the worldwide financial system, the JPMorgan CEO stated:
You can’t sit right here and say that one thing unhealthy might not occur. I’m not making an attempt to scare folks. I’m extra within the class that one thing may go unsuitable.
He cautioned that inflation is prone to persist at elevated ranges for longer. “We’re on this sugar high and I’m not saying this ends in a depression [but] I think there’s more inflationary forces out there … There’s a higher chance that rates go higher, inflation doesn’t go away, and all these things cause more problems of some sort,” the chief detailed.
Earlier within the present month, Dimon expressed his view that the Federal Reserve would possibly enhance rates of interest additional, stating: “I suspect that they may not be done.” He added: “I think there’s a chance that inflation is just a little stickier than people think and their fiscal and monetary stimulus in the last several years is more than people think. Unemployment is very low.” Back in September, Dimon had cautioned that the Fed may doubtlessly raise interest rates to 7%, which could lead the U.S. financial system into stagflation. In October, he disclosed his statement of two “extraordinary” storm clouds impacting the U.S. financial system. “One is the fiscal money being spent is so big, the largest in peacetime ever — America and kind of around the world — with very high deficits and QT we’ve never had,” the chief detailed, clarifying: “The biggest storm cloud is geopolitical.”
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