Situs Slot Gacor

Dimon says ready for US economic “hurricane” due to inflation

June 1 (Reuters) – Jamie Dimon, chairman and CEO of JPMorgan Chase & Co (JPM.N) described the challenges facing the US economy as a “hurricane” along the way and called on the Federal Reserve to take strong action to avoid tilt the world’s largest economy into a recession.

Dimon̵[ads1]7;s comments come the day after President Joe Biden met with central bank governor Jerome Powell to discuss inflation, which is hovering at 40-year highs. read more

“It’s a hurricane,” Dimon said at a banking conference, adding that the current situation is unique. “Right now it’s a little sunny, things are going well. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just do not know if it’s a minor one or Superstorm Sandy,” he added. to.

Sign up now for FREE unlimited access to

The Fed is under pressure to resolutely make a dent in an inflation rate that runs at more than three times the target of 2% and has caused a jump in the cost of living for Americans. It is facing a difficult task of curbing demand enough to curb inflation while not causing a recession. read more

“The Fed needs to address this now with raising interest rates and QT (quantitative easing). In my view, they need to do QT. They have no choice because there is so much liquidity in the system,” Dimon said.

Major central banks, already planning rate hikes in a fight against inflation, are also preparing for a joint withdrawal from key financial markets in an ever-first round of global quantitative easing that is expected to limit credit and add stress to an already declining world economy. read more

The inflation battle has become the focal point of Biden’s June agenda in the midst of his declining opinion polls and before the congressional election in November. read more

Uncertainty about the US Federal Reserve’s political moves, the war in Ukraine, prolonged supply chain tightening due to COVID-19 and higher government interest rates have shaken global stock markets, with the benchmark S&P 500 (.SPX) falling 13.3% year-on-year. -Date.

“You have to prepare. JPMorgan is equipping us, and we’ll be very conservative in our balance sheet,” Dimon added.


Wells Fargo & Cos (WFC.N) CEO warned that the Federal Reserve would find it “extremely difficult” to handle a soft landing of the economy as the central bank tries to extinguish the inflation fire with interest rate hikes.

The CEO of the fourth largest US lender also said that Wells Fargo sees a direct impact from inflation on consumer spending, especially on fuel and food.

“The scenario of a soft landing is … extremely difficult to achieve in the environment we are in today,” Wells Fargo CEO Charlie Scharf said at the conference.

“If it’s a short recession, it’s not that deep … there will be some pain as you go through it, overall everyone will do fine when they get out of it,” he added.

Scharf said that although overall consumption is strong, growth is slowing.

“Businesses continue to use, where they can, they increase inventories … we expect the consumer and eventually businesses to weaken, which is part of what the Fed is trying to construct, but hopefully in a constructive way,” he added. .

Recent Fed reports and surveys reported on average households in a strong financial position, with working families doing well, and unemployment at levels more similar to the boom years of the 1950s and 1960s. Wages for many lower-skilled occupations are rising, and bank accounts are on average still flush with cash from coronavirus support programs.

But confidence has waned, and in a recent Reuters / Ipsos poll, the economy topped the respondents’ list of concerns.

“I do not think that our crystal ball relative to the macro later this year, 2023, 2024, is necessarily any better than others. It is clear that we are going to see different effects of the Fed actions in different companies,” GE chief Larry Culp, told the conference.

Yet not everyone in corporate America is seeing a decline.

“The vast majority of the markets we serve are still fairly strong,” said Caterpillar Inc (CAT.N) CEO Jim Umplebly.

“And our challenge at the moment, quite frankly, is the supply chain, our ability to supply enough equipment to meet all the demand that is out there,” he added.

Sign up now for FREE unlimited access to

Reporting by Elizabeth Dilts, Niket Nishant Further Reporting by Rajesh Singh and Bianca Flowers Writing by Denny Thomas Editing by Nick Zieminski

Our standards: Thomson Reuters Trust Principles.

Source link

Back to top button