JPMorgan Financial Services CEO warns of coming ‘economic storm’

JPMorgan CEO Jamie Dimon has warned that an economic “storm” is coming: “You’d better brace yourself.”

* JPMorgan – one of the oldest banks in the world, ranked in the top of financial services, investment banking and wealth management.

Jamie Dimon on the US economy

At the Financial Conference organized by Alliancebernstein Holdings Grants – held on June 1, JPMorgan & Chase CEO Jamie Dimon warned of an impending “economic storm” in a graphic way:

“It was a storm. Right now it’s sunny, everything is going well, everyone thinks the Fed can handle it.”

“That storm is right over there, and they’re on their way. We just don’t know if it’s a minor storm or a super typhoon… You better prepare yourself.”

The head of JPMorgan said in May that there were “storm clouds”. In the present, he has revised his forecast. “I said storm clouds, they’re big storm clouds, they’re–a storm.” The leader also informed that JPMorgan is preparing and will be very cautious with the company’s balance sheet.

The reason for the warning of the CEO of JPMorgan

Jamie is concerned about a number of key issues. First, the Federal Reserve (Fed) is expected to reverse its emergency bond-buying programs and shrink its balance sheet, and quantitative tightening (QT) is expected to begin. early this month.

“We’ve never had QT like this, so you’re seeing something where you can write history books for 50 years.”

He explained that central banks “There’s no choice because there’s too much liquidity in the system… They have to remove some of the liquidity to stop speculation, drop in house prices and the like.”

Jamie also worries that the Russia-Ukraine war will cause an escalation in prices, including for food and fuel. He warned that oil is likely to hit levels 150 – 175 USD/barrel.

With the view that wars make things worse, with unintended consequences, the leader emphasized:

“We are currently not taking the appropriate actions to protect Europe from what is to come with oil in the short term.”

In an interview with Bloomberg last month, Jamie said that the Fed should have moved to raise interest rates sooner. He also acknowledged his worries about the Fed starting a recession.

Not only JPMorgan CEO warned of an economic recession in the near future, Big Short investor Michael Burry, Allianz chief economic adviser – Mohamed El-Erian or Tesla CEO Elon Musk also expressed similar views. on one’s own.

Blackrock, the world’s largest asset manager (~$10 trillion), explained last week:

“If they [Fed] raise interest rates too much, they risk causing a recession. If they don’t tighten enough, another risk of “running away” from possible inflation.”