JPMorgan Chase CEO Jamie Dimon stated 2024 may be just like the Seventies — and it is extra in regards to the financial system than nostalgia.
On Tuesday, Dimon listed out some widespread developments between the 2 eras to Fox Enterprise Community’s Maria Bartiromo. These embody giant fiscal deficits, altering commerce flows, and dedication to very large authorities spending — this time for infrastructure and the Inflation Discount Act. These developments, he stated, are “all inflationary.”
“And that appears slightly extra just like the Seventies to me,” Dimon advised Bartiromo, referring to a interval when stagnant progress and excessive inflation pressured the financial system.
Dimon’s issues stand in distinction to some economists’ optimistic market expectations of a mushy touchdown after inflation cooled from a four-decade excessive in June 2022 following relentless rate of interest hikes by the Federal Reserve. The Fed has held charges regular since July and signaled three price cuts this yr.
However the JPMorgan boss is not certain the financial system will see the mushy touchdown.
“Clearly, all of us in enterprise have recognized find out how to cope with the ups and downs of vicissitudes of the financial system. However I do assume the crosscurrents are fairly excessive,” stated Dimon, citing a number of issues together with COVID-19 stimulus cash working out quickly and still-high rates of interest.
“I am slightly skeptical of this sort of ‘Goldilocks’ sort of state of affairs,” he stated, referring to an financial system that’s neither too scorching nor too chilly.
Dimon warned {that a} recession should still be on the best way because it takes time for the results of the Fed’s price hikes to point out up within the financial system.
“I believe they did the suitable factor to boost charges. I believe it was slightly late, and I believe they’re doing the suitable factor simply to attend and see what occurs,” he stated. “However all of these elements might very nicely push us to recession, versus a mushy touchdown.”
