https://sputnikglobe.com/20230407/jpmorgan-ceo-warns-recession-storm-clouds-on-the-horizon-for-bruised-us-economy-1109255859.html
JPMorgan CEO Warns Recession 'Storm Clouds' on the Horizon for Bruised US Economy
JPMorgan CEO Warns Recession 'Storm Clouds' on the Horizon for Bruised US Economy
Sputnik International
With inflation still high, an ongoing banking crisis, global strife, and an ongoing debt ceiling debate, JPMorgan Chase CEO Jamie Dimon has warned that the economy may tough challenges in the near future.
2023-04-07T21:47+0000
2023-04-07T21:47+0000
2023-04-07T21:45+0000
jamie dimon
jpmorgan chase
recession
job report
inflation
federal reserve
economy
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JPMorgan Chase CEO Jamie Dimon said in an interview on Thursday that there are “storm clouds” on the horizon for the US economy, though he thinks the worst of the banking crisis is over.However, Dimon admitted he believes the banking crisis will increase the chance of a recession but that it will not cause it on its own.Last month, Silicon Valley Bank collapsed, sending shockwaves across the financial system and causing regulators to take over both Silicon Valley Bank and Signature Bank. The Federal Reserve also launched an emergency loan program for banks.The bigger fear for the economy, according to Dimon, is what he calls the Federal Reserve’s “tightening regimen,” presumably referring to increasing interest rates, high inflation, the conflict in Ukraine and the potential default of the US government if the debt ceiling is not raised.The Federal Reserve raised loan interest rates several times last year and early this year in an attempt to curb inflation rates, a strategy that finally started showing dividends in the fall of last year and continuing this year with inflation falling to 6% over the year in February, compared to a high of 9.1% in June.Still, a 6% inflation rate is far higher than the amount most economists say is healthy, 2-3%. Because of that, the Federal Reserve is considering another rate hike later this year but some economists have been warning that an aggressive rate hike could cause a recession.Dimon noted he was unsure whether another rate hike would be coming, but warned community banks and Americans that they should be prepared for one.The JPMorgan Chase CEO contends he is still optimistic about the economy because of the human capital in America, and said that the potential default on government debt is the biggest risk to the economy.While both Republicans and Democrats agree that the US government must not default on its debt, discussions between the two parties have broken down, and if an agreement is not reached soon, economists warn the default could come as soon as September.The government will not default, Dimon said. “Not as long as I’m alive. Boy, we’re going to keep fighting this one,” the bank CEO remarked though he did not say how he plans to participate in that fight as a private, unelected citizen.While job growth has been the feather in the Biden administration’s cap when it comes to the economy, the administration has been saying that job growth needs to slow to stabilize the economy and tame inflation. On that front, progress has been made. The latest jobs report indicates there were 236,000 jobs created in March, down from 311,000 the month prior.But Americans do not share the administration’s optimism. According to a CNN poll conducted in March, 71% of Americans rate the economy as somewhat or very poor. While that is an improvement from this summer when 82% of Americans said the same thing, it is still the highest number for that question for any period outside of the Biden administration since October 2013.Perhaps more worrying, 61% of Americans say the country will be poor a year from now, the highest percentage since the poll started asking that question in 1997.
https://sputnikglobe.com/20230322/us-dow-plummets-530-points-after-federal-reserve-hikes-interests-rates-amid-banking-crisis-1108703488.html
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economy, inflation, banking crisis, interest rates, federal reserve, jamie dimon
economy, inflation, banking crisis, interest rates, federal reserve, jamie dimon
JPMorgan CEO Warns Recession 'Storm Clouds' on the Horizon for Bruised US Economy
With inflation still high, an ongoing banking crisis, global strife, and a raging debt ceiling debate, a high-ranking banking executive has warned the American economy may soon face tough challenges in the near future.
JPMorgan Chase CEO Jamie Dimon said in an interview on Thursday that there are “storm clouds” on the horizon for the US economy, though he thinks the worst of the banking crisis is over.
“I don’t know [if more banks will fall this year] but if there are, honestly, it will be resolved and there will probably be less of them. I think we are getting near the end of this particular crisis,” he said.
However, Dimon admitted he believes the banking crisis will increase the chance of a recession but that it will not cause it on its own.
“It is not definitive, it's just like a weight on the scale,” Dimon explained. “We are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit. It won’t necessarily force a recession, but it is recessionary.”
Last month, Silicon Valley Bank collapsed, sending shockwaves across the financial system and causing regulators to take over both Silicon Valley Bank and Signature Bank. The Federal Reserve also launched an emergency loan program for banks.
The bigger fear for the economy, according to Dimon, is what he calls the Federal Reserve’s “tightening regimen,” presumably referring to increasing interest rates, high inflation, the conflict in Ukraine and the potential default of the US government if the debt ceiling is not raised. The Federal Reserve raised loan interest rates several times last year and early this year in an attempt to curb inflation rates, a strategy that finally started showing dividends in the fall of last year and continuing this year with inflation falling to 6% over the year in February, compared to a high of 9.1% in June.
Still, a 6% inflation rate is far higher than the amount most economists say is healthy, 2-3%. Because of that, the Federal Reserve is considering another rate hike later this year but some economists have been warning that an aggressive rate hike could cause a recession.
Dimon noted he was unsure whether another rate hike would be coming, but warned community banks and Americans that they should be prepared for one.
The JPMorgan Chase CEO contends he is still optimistic about the economy because of the human capital in America, and said that the potential default on government debt is the biggest risk to the economy.
While both Republicans and Democrats agree that the US government must not default on its debt, discussions between the two parties have broken down, and if an agreement is not reached soon, economists warn the default could come as soon as September.
The government will not default, Dimon said. “Not as long as I’m alive. Boy, we’re going to keep fighting this one,” the bank CEO remarked though he did not say how he plans to participate in that fight as a private, unelected citizen.
While job growth has been the feather in the Biden administration’s cap when it comes to the economy, the administration has been saying that job growth needs to slow to stabilize the economy and tame inflation. On that front, progress has been made. The latest jobs report indicates there were 236,000 jobs created in March, down from 311,000 the month prior.
“Generally this report is consistent with steady and stable growth,” said National Economic Council Director Lael Brainard. “We’re seeing some moderation — we’re certainly seeing reduction in inflation that has been quite welcome.”
But Americans do not share the administration’s optimism. According to a
CNN poll conducted in March, 71% of Americans rate the economy as somewhat or very poor. While that is an improvement from this summer when 82% of Americans said the same thing, it is still the highest number for that question for any period outside of the Biden administration since October 2013.
Perhaps more worrying, 61% of Americans say the country will be poor a year from now, the highest percentage since the poll started asking that question in 1997.
