‘We’re Not Out of the Woods Yet’: JPMorgan Chase’s CEO Jamie Dimon Warns of an Economic Outcome That’s Worse Than Recession
After getting rid of intricate legal problems connected to the Bank’s long association with the late convicted pedophile Jeffrey Epstein, JPMorgan Chase’s CEO Jamie Dimon has retaken his position as one of the major economic oracles in today’s America.
And he has been very careful with his projections, warning that the US economy is by no means out of the woods yet, and warning of a terrible prospect ahead that is worse than a recession.
Yahoo Finance reported:
“JPMorgan Chase CEO has laid out the ‘worst outcome’ for America’s economic future, beyond recession.
‘The worst outcome is stagflation’, said Dimon. ‘And by the way, I wouldn’t take it off the table’.”
Dimon made his remarks earlier this week at the Council of Institutional Investors in New York.
Dimon’s JPMorgan Chase is the largest bank in the United State, so his word carries a lot of weight.
Stagflation is a portmanteau word formed by the words ‘stagnation’ and ‘inflation’, and it refers to ‘a state where economic growth slows while inflation and unemployment rise’.
“The economic consequences of stagflation may cause retirement savings to go down as well as the stock market to crash; it was last seen in the U.S. during the 1970s, according to Investopedia.”
While inflation in August did grow less than expected at 2.5%, the outlook for the federal debt is bleak.
The amount is no less than $35 trillion as of September 12.
That means that Interest payments on the national debt now are bigger than the costs of both Medicare and the national defense budget.
National debt may therefore contribute to further inflation on the horizon.
“This is the first time in American history that interest payments on the national debt have risen above $1T. ‘So, it’s hard to look at [it] and say, ’Well, no, we’re out of the woods’. I don’t think so’, said Dimon.”
CNBC reported:
“The chief executive of the largest U.S. bank makes his comments at a time when investors are turning their attention to signs of slowing growth. Recent readings showed pricing pressures increasingly on their way to the Federal Reserve’s 2% inflation target, but reports on employment and manufacturing have revealed some signs of softening.”
Dimon worries that of inflationary forces such as higher deficits and increased infrastructure spending will add pressure to an economy that is still reeling from the impact of higher interest rates.
“The bank leader has previously warned of an economic slowdown. In August, he said the odds of a ‘soft landing’ were around 35% to 40%, implying a recession is the more likely outcome.”
Read more:
STAGFLATION? JPMorgan Chase CEO Dimon Fears US May Be Heading back to 1970s’ Economic Woes
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