JPMorgan Chase CEO Jamie Dimon warned Wall Street executives Wednesday that a recession is not outside the bounds of possibility in the near future, CNN reported.
Speaking at the 2023 DealBook Summit hosted by The New York Times, Dimon pointed out that inflation could rise further as governments struggle to fund the green economy, remilitarize, and address the energy crises.
“A lot of things out there are dangerous and inflationary. Be prepared,” Dimon said. “Interest rates may go up, and that might lead to recession.”
While Dimon acknowledged that the labor market in the U.S. has been resilient, he hammered that inflation is seriously “hurting people.”
The U.S. pumped billions into the economy during the height of the COVID-19 pandemic, causing what he described as a “sugar high.” However, that high might be fading fast.
“I think quantitative easing and tightening and these geopolitical issues can bite,” Dimon explained.
In an interview last month, Dimon told Bloomberg that interest rates could continue going up to as high as 7%. The current Federal Reserve Open Markets Committee rate is 5.25% to 5.5%.
Dimon said there are many potentially bad outcomes of a 7% rate, notably a dampening of consumer spending and business investments that would likely lead to a slowdown in economic growth.
If that happens, “you’re going to see a lot of people struggling,” Dimon said at the time.
Luca Cacciatore | email@example.com
Luca Cacciatore, a Newsmax general assignment writer, is based in Arlington, Virginia, reporting on news and politics.
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