Jamie Dimon: ‘Soft landing’ unlikely for US economy

Jamie Dimon
  • The CEO of JPMorgan Chase, Jamie Dimon, affirms that the consumption of the American people is stable.
  • For the executive, the possibilities that the Central Bank manages to cool down the economy are very minimal.
  • JPMorgan Chase’s revenue is down 17% from a year earlier.
  • Factors that would generate a world recession would be the constant increases in interest rates, inflation, and the Russo-Ukrainian war.

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Yesterday, Jamie Dimon, CEO of JPMorgan Chase & Co, commented on the Fed, saying that “the Fed is unlikely to deliver a soft landing” for the US economy. For Dimon, this landing will not be possible as long as interest rates continue to rise to reduce inflation.

At a conference in Washington, Dimon said the chances of central bank policies bringing a red-hot economy to a halt are slim.

Even so, the CEO maintains his support and faith in the president of the Fed, Jerome Powell, and considers that one of the worst scenarios that can be faced and that must be avoided is stagflation.

Dimon, on the other hand, believes that the Fed’s benchmark rate will probably need to be increased from 4% to 4.5%. This forecast is affirmed by several economists in the wake of persistent inflation.

We can see how core inflation has increased. This reached a record 6.6% last month compared to data provided last year.

For the executive, this is a process that will take time. Earlier this week Dimon commented that he is preparing for a recession in the United States and worldwide by mid-2023. Factors such as the constant increases in interest rates, inflation, and the Russo-Ukrainian war.

JPMorgan Chase Yield

In the third quarter of this year, the company managed to earn 9,700 million, representing a drop of 17% compared to the data of the previous year for the same date. This fall is a clear demonstration that the financial markets are still on the tightrope and that even so an increase in interest rates has been generated, this will not be a major problem for the United States central bank.

Even with the recent declines, JPMorgan Chase managed to post an increase in quarterly revenue of nearly $33 billion, compared to $30 billion a year earlier.

However, expenses also increased. The bank disclosed that it had incurred losses of $959 million on some investment assets and added $808 million to its reserve to protect against future loan losses. It also wrote off $727 million in bad debt.

“In the United States, consumers continue to spend with strong balance sheets, job openings are plentiful, and businesses remain healthy.”

Jamie Dimon said in a statement accompanying the results.