The JPMorgan CEO, who forecasted an economic disaster in 2022 that never came, says a recession isn’t “off the table”
Two years after warning that a ‘‘hurricane’’ could hit the U.S. economy, JPMorgan $JPM Chase CEO Jamie Dimon re-upped his concerns Tuesday about a potential recession in the U.S. He said the possibility of a recession is not “off the table” and that the Federal Reserve should hold off on cutting interest rates for now. Dimon made the remarks at the Australian Financial Review Business Summit in Sydney.
“The world is pricing in a soft landing, at probably 70-80%,” he told the summit via video link, referring to when inflation comes down without a painful rise in unemployment. “I think the chance of a soft landing in the next year or two is half that. The worst case would be stagflation.”
Dimon said he was uncertain about current economic indicators and suggested that the Fed wait for more information before lowering interest rates. The central bank last year raised its benchmark Federal Funds Rate to 5.5%, which makes loans more expensive for borrowers. Economists are expecting the Fed to lower interest rates in June for the first time since it started hiking them in 2022 to fight rising inflation, which has since cooled but not returned all the way to pre-pandemic levels.
Dimon has at least some track record of being inconsistent and missing the mark on the economy and emerging technologies. In mid-2022, he predicted that a ‘‘hurricane’’ would hit the economy. He also has something of a love-hate relationship with blockchain technology, which drives cryptocurrencies like Bitcoin. He once said blockchain is useful for exchanging assets or data, but in 2018, he called Bitcoin a fraud. Then in 2019, JPMorgan launched its own dollar-backed digital coin called JPM Coin for payments between clients.
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