Jamie Dimon: Fed Will Need to Raise Rates Beyond 4.5% to Cool Inflation
JPMorgan CEO Jamie Dimon provided a not-so-rosy outlook on the US economy, and slams the Biden administration for begging Saudi Arabia for oil while flip-flopping on Venezuela foreign policy.
According to Dimon, the inflation problem in the US is so stubborn the Fed will have to raise its benchmark rate above the 4% to 4.5% range consensus estimates are calling for, which will likely bring on a recession in the coming months. “I don’t know if it could be a soft landing— I don’t think so, but it might,” he said while speaking at a Washington industry conference as cited by Business Insider. The latest BLS CPI print showed inflation surpassed expectations again, rising 0.4% to an annualized 8.2% in September.
Dimon doesn’t believe the US economy will be able to withstand the entirety of the Fed’s forthcoming hawkish policies, and will likely eclipse into a recession within the next six to nine months, bringing with it substantial market declines. “In a tough recession, you could expect the market to go down another 20% to 30%.” But, Dimon also insisted that the American consumer is still in a strong financial position, which he expects will remain the case for the next nine months— or whenever the recession hits.
Meanwhile, in a separate set of comments, the JPMorgan CEO expressed his discontent with the Biden administration, calling out the president for lacking a backbone when it comes to setting US energy policy. “President of the Unites States needs to stand up and say we may not meet our 2050 climate objectives because this is a fucking war,” he exclaimed. “Time to stop going hat in hand to Venezuela and Saudi and start pumping more oil & gas in the USA.”
Dimon also added that most investors “don’t give a shit” about ESGs, and markets shouldn’t “cede governance to do-gooder kids on a committee.”
Information for this briefing was found via Business Insider. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
