JPMorgan Chase CEO Jamie Dimon says the U.S. banking disaster just isn’t over and “there shall be repercussions from it for years to come back.” The chief added that current financial institution failures “have considerably modified the market’s expectations,” and the chances of a recession have elevated.
Jamie Dimon, chairman and CEO of JPMorgan Chase, shared his issues concerning the U.S. economic system, recession, and the banking disaster in his annual letter to shareholders, printed final week. The letter adopted the current collapse of a number of main banks within the U.S., together with Silicon Valley Financial institution and Signature Financial institution. Calling current financial institution failures a “banking disaster,” Dimon warned:
The present disaster just isn’t but over, and even when it’s behind us, there shall be repercussions from it for years to come back.
“Current occasions are nothing like what occurred in the course of the 2008 international monetary disaster (which barely affected regional banks),” the JPMorgan boss defined. “At the moment, there was monumental leverage just about in all places within the monetary system.” In distinction, he famous: “This present banking disaster entails far fewer monetary gamers and fewer points that have to be resolved.”
Commenting on the Federal Reserve’s efforts to curb inflation and future take hikes, Dimon opined:
If now we have greater inflation for longer, the Fed could also be pressured to extend charges greater than individuals anticipate regardless of the current financial institution disaster.
As well as, he cautioned that quantitative tightening (QT) “could have ongoing impacts that may, over time, be one other power, pushing longer-term charges greater than at present envisioned. This will likely happen even when now we have a light — or not-so-mild — recession, as we noticed within the Nineteen Seventies and Eighties.”
Dimon defined that the failures of Silicon Valley Financial institution and Credit score Suisse “have considerably modified the market’s expectations, bond costs have recovered dramatically, the inventory market is down, and the market’s odds of a recession have elevated.” He emphasised:
Whereas that is nothing like 2008, it isn’t clear when this present disaster will finish.
Nonetheless, the JPMorgan government insisted that the present economic system is “fairly good” however reiterated that there are “storm clouds forward.”
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