JPMorgan CEO Jamie Dimon has warned that an financial “hurricane” is coming. “You better brace yourself,” he suggested. “We just don’t know if it’s a minor one or Superstorm Sandy.”
Jamie Dimon on the U.S. Economy and QT
The CEO of JPMorgan & Chase, Jamie Dimon, warned about an incoming financial hurricane Wednesday at a monetary convention sponsored by Alliancebernstein Holdings.
“It’s a hurricane,” Dimon exclaimed. While noting that “Right now it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle it,” the JPMorgan government careworn:
That hurricane is correct on the market down the street coming our manner. We simply don’t know if it’s a minor one or Superstorm Sandy … You higher brace your self.
The JPMorgan chief mentioned in May that there have been “storm clouds.” However, he has now revised his forecast. “I said there’s storm clouds, they’re big storm clouds, they’re — it’s a hurricane,” he cautioned. “JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet.”
Dimon is worried about a number of key points. Firstly, the Federal Reserve is anticipated to reverse its emergency bond-buying packages and shrink its steadiness sheet, and the quantitative tightening (QT) is scheduled to start this month.
The JPMorgan boss opined:
We’ve by no means had QT like this, so that you’re one thing you might be writing historical past books on for 50 years.
He defined that central banks “don’t have a choice because there’s too much liquidity in the system … They have to remove some of the liquidity to stop the speculation, reduce home prices and stuff like that.”
Dimon can also be apprehensive concerning the Russia-Ukraine conflict and its impression on commodities, together with meals and gasoline. He warned that oil might doubtlessly hit $150 to $175 a barrel.
Warning that “wars go bad” and there are “unintended consequences,” the chief careworn:
We’re not taking the right actions to guard Europe from what’s going to occur to grease within the brief run.
Last month, Dimon informed Bloomberg that the Federal Reserve ought to have moved sooner to lift rates of interest. He admitted that he’s apprehensive concerning the Fed beginning a recession.
A rising quantity of folks have lately warned of a recession, together with the Big Short investor Michael Burry, Allianz’s chief financial advisor Mohamed El-Erian, and Tesla CEO Elon Musk.
Blackrock, the world’s largest asset supervisor with practically $10 trillion beneath administration, lately defined: “If they [the Fed] hike interest rates too much, they risk triggering a recession. If they tighten not enough, the risk becomes runaway inflation.”
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