JPMorgan’s Jamie Dimon sees economic ‘hurricane’ coming: ‘You better get ready’

Jamie Dimon, CEO of JPMorgan Chase & Co., sees a storm on the horizon for the US economy, but he’s not sure if it will be a super storm or a small one.

Dimon turned to weather metaphors when asked at Wednesday’s Bernstein Strategic Decisions Conference about the challenges the Federal Reserve is facing in trying to tame inflation.

The economy remains “sunny” at the moment as the US government’s fiscal stimulus “is still in the pockets of consumers who spend it,” according to a transcript of the event released by FactSet.

Consumer spending remains bullish, with jobs plentiful and wages rising, but inflation continues to threaten prosperity.

“Everybody thinks the Fed can handle it,” Dimon said. “This hurricane is right out there on the road, coming toward us. We just don’t know if it’s a smaller one or Superstorm Sandy or Andrew or something and you better brace yourself.”

He said he positioned JPMorgan JPM,
to focus on the strength of its balance sheet to withstand any impact.

Dimon pointed the finger at the war in Ukraine, which raised oil price hikes, fiscal-led growth and the challenge of raising interest rates without triggering a recession, as some of his key concerns.

“Wars go bad — they go south,” Dimon said. “They have unintended consequences and this is happening in the world’s commodity markets for wheat, oil, gas and the like, which I believe will continue. We’re not taking the right actions to protect Europe from what’s going to happen to oil in the short term and we’re not taking the right actions to protect you all… it almost has to go up in price.”

The banking industry remains in solid shape to weather any storm, he said.

When asked about his reaction to Dimon’s comments, St. Louis Fed President James Bullard said the European economy was more at risk than the US economy from the war in Ukraine.

He said the quantitative tightening will be phased in so it won’t come as a big shock as it would otherwise.

“We will be watching closely how the quantitative tightening progresses,” he said.

Also read: Fed Begins Quantitative Tightening: What It Means for Financial Markets

Amid recession jitters and higher interest rates, bank stocks have weakened in 2022 after a strong 2021.

The Financial Select SPRD ETF XLF,
has lost 10.6% so far in 2022, compared to a 13.8% loss for the S&P 500 SPX,
JPMorgan Chase shares are down 17.7% in 2022 as of Wednesday trading.

MarketWatch Business Editor Greg Robb contributed to this report. JPMorgan’s Jamie Dimon sees economic ‘hurricane’ coming: ‘You better get ready’

Brian Lowry

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