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Jamie Dimon is warning that an economic ‘hurricane’ is on the way: ‘You better brace yourself’
“Proper now it is type of sunny, issues are doing superb. Everybody thinks the Fed can deal with this,” Dimon mentioned at a Bernstein convention. “That hurricane is true on the market down the highway coming our manner.”
“We simply do not know if it is a minor one or Superstorm Sandy. You higher brace your self,” Dimon mentioned, including that JPMorgan Chase is making ready for a “non-benign atmosphere” and “dangerous outcomes.”
The video within the participant above is from a earlier, associated report.
Dimon mentioned that the economic system is “distorted” by inflation. He is additionally anxious that the Fed is beginning to unwind its bond portfolio, a course of often called quantitative tightening, on the identical time it’s elevating rates of interest. That is one thing that the market is just not ready for, Dimon mentioned, including that individuals will probably be “writing about [this]in historical past books for 50 years.”
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However the Fed is in a bind. Dimon mentioned the central financial institution should increase charges due to surging housing costs and different inflation pressures. He harassed that he nonetheless thinks the US banking system is in “nice form” and might face up to these challenges.
Dimon additionally mentioned that JPMorgan Chase goes to do all it might to draw expertise to remain on high of the monetary world. The CEO mentioned the financial institution will probably be “spiritual” about paying nicely to maintain its finest employees.
Dimon’s extra cautious outlook comes just some days after he sounded a bit extra upbeat about what’s subsequent for the markets and the economic system.
Talking at an analyst assembly on the finish of Might, Dimon mentioned that there have been “huge storm clouds” on the horizon for the economic system however expressed hope that they could “dissipate.”
“If it was a hurricane, I’d let you know that,” Dimon mentioned on the analyst assembly, including that present circumstances additionally aren’t just like the “tsunami” that banks confronted in 2007 and 2008 when the mortgage market was melting down and several other massive monetary establishments collapsed.
Dimon will not be predicting a tsunami simply but. However a hurricane is dangerous sufficient, and definitely extra damaging than an everyday storm. Dimon mentioned he’s additionally anxious in regards to the battle in Ukraine and the affect it should have on oil costs, predicting on Wednesday that it is within the playing cards for crude costs to finally spike as excessive as $150 to $175 a barrel.
“Wars go dangerous. They go south. They’ve unintended penalties,” he mentioned, including that this battle will proceed to roil the commodity markets all over the world, impacting the costs of oil, gasoline and wheat.
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