New York, USA (CNN)– Jamie Dimon is no meteorologist, but the CEO of JPMorgan Chase predicts an economic “hurricane” caused by the war in Ukraine, rising inflation pressures and higher interest rates from the Federal Reserve. .
“Right now it’s a bit sunny, things are going well,” Dimon said at a financial conference. “Everyone thinks the Fed can handle that, but the hurricane is on the way and it’s coming our way.”
“We don’t know if it’s a little storm or Sandy, you’d better be prepared for that,” Damon added, adding that JPMorgan Chase is preparing for a “unhealthy environment” and “bad outcomes.”
Dimon said the economy was “distorted” by inflation. He is also concerned that the Federal Reserve has begun unwinding its bond portfolio, a process known as quantitative tightening, at the same time it is raising interest rates. This is something the market isn’t prepared for, Damon said, adding that people “will write about it in the history books for 50 years.”
But the Federal Reserve is in trouble. Dimon said the central bank should raise interest rates due to rising house prices and other inflation pressures. He stressed that he still believes that the US banking system is in a “good shape” and can withstand these challenges.
Damon also said that JPMorgan Chase will do everything in its power to attract talent to stay ahead of the financial world. The CEO added that the bank would be “meticulous” about paying good salaries to keep its best workers.
Dimon’s more cautious outlook comes a few days after he appeared to be slightly optimistic about what’s next for the markets and the economy.
Speaking at a meeting of analysts at the end of May, Dimon said there were “big storm clouds” looming for the economy but hoped they would “dissipate”.
“If it’s a hurricane, I’ll tell you,” Dimon said at the analysts’ meeting, adding that current conditions are also not like the “tsunami” that banks faced in 2007 and 2008 when the mortgage market was collapsing and many large financial institutions collapsed.
Damon may not have expected a tsunami yet, but a hurricane is bad enough, and certainly more damaging than a regular storm. Dimon said he is also concerned about the conflict in Ukraine and its impact on oil prices, predicting on Wednesday that crude oil prices will eventually rise to $150 and could reach $175 a barrel.
“Wars are getting worse and have unintended consequences,” he said, adding that this conflict will further disrupt commodity markets around the world, affecting oil, gas and wheat prices.