JP Morgan Warns U.S. Economy Is in Dangerous & Inflationary Position

Vinod Dsouza
JP Morgan CEO Jamie Dimon
Source: CNBC

The CEO of JP Morgan Jamie Dimon warns that the U.S. economy is in a dangerous and inflationary position. Dimon stressed that investors need to be prepared to absorb the shock that the markets will throw sometime in 2024. He also explained that the U.S. economy is in “the most dangerous time the world has seen in decades.” The JP Morgan CEO spoke in length about the U.S. economy’s prospects at the New York Times Dealbook Summit this week organized by British Prime Minister Rishi Sunak in London.

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The Federal Reserve hiking interest rates and the conflict between Israel and Palestine could be the main cause for a market crash, he opined. “I look at a lot of things out there, both dangerous and inflationary. So I just say, be prepared. The rates may go up, both the short rate and the 10-year rate, and be prepared that might lead to recession.”

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Dimon explained that the current market cycle is promoted by the fiscal stimulation that’s keeping the markets up. He warned that once the bubble bursts, things will look different, and corporate spending will come to a halt.

“When people look at the current economy and things are going good, we’ve had a little bit of drugs injected directly into our system called fiscal stimulation,” he said.

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Once the U.S. government stops the fiscal stimulation, things could get worse for the global economy, said Dimon. “Corporate profits are up because people are spending a lot of money. Where do they get the money? The government gave it to them.”

The CEO stressed that he’s not trying to scare people but is only warning them about a looming disaster. “I’m not trying to scare people. I’m more in the category that something could go wrong,” he summed it up.