JPMorgan Chase CEO Jamie Dimon mentioned 2024 could be just like the 1970s — and it is extra concerning the economic system than nostalgia.
On Tuesday, Dimon listed out some frequent developments between the 2 eras to Fox Business Network’s Maria Bartiromo. These embrace massive fiscal deficits, altering commerce flows, and dedication to large authorities spending — this time for infrastructure and the Inflation Reduction Act. These developments, he mentioned, are “all inflationary.”
“And that appears a little bit extra just like the Nineteen Seventies to me,” Dimon instructed Bartiromo, referring to a interval when stagnant growth and high inflation pressured the economic system.
Dimon’s considerations stand in distinction to some economists’ optimistic market expectations of a mushy touchdown after inflation cooled from a four-decade high in June 2022 following relentless rate of interest hikes by the Federal Reserve. The Fed has held charges regular since July and signaled three rate cuts this yr.
However the JPMorgan boss is not certain the economic system will see the mushy touchdown.
“Clearly, all of us in enterprise have recognized the right way to cope with the ups and downs of vicissitudes of the economic system. However I do suppose the crosscurrents are fairly excessive,” mentioned Dimon, citing a number of considerations together with COVID-19 stimulus cash operating out quickly and still-high rates of interest.
“I am a little bit skeptical of this sort of ‘Goldilocks’ sort of state of affairs,” he mentioned, referring to an economic system that’s neither too scorching nor too chilly.
Dimon warned {that a} recession should be on the best way because it takes time for the results of the Fed’s charge hikes to point out up within the economic system.
“I feel they did the proper factor to lift charges. I feel it was a little bit late, and I feel they’re doing the proper factor simply to attend and see what occurs,” he mentioned. “However all of these elements could very effectively push us to recession, versus a mushy touchdown.”