2023-11-29 20:53:00
(CNN) — Jamie Dimon, CEO of JPMorgan Chase, issued a strong warning to Wall Street on Wednesday: Inflation could rise further and recession is not out of the question.
“Many things we are seeing are dangerous and inflationary. Be prepared,” he said at The New York Times DealBook Summit 2023 in New York. “Interest rates could rise and that could lead to a recession.”
Governments around the world need more money, he explained, to finance the green economy, remilitarize and address energy crises, and all of that will be inflationary.
“I’m cautious about the economy,” he said. The U.S. labor market has shown resilience, but “inflation is hurting people.”
Stimulus money delivered during Covid-19 lockdowns and quantitative easing by the Federal Reserve injected “drugs directly into our system” and created an economic “sugar high,” Dimon explained. But that is fading. “I think easing and quantitative tightening and these geopolitical issues can play a role,” he said.
In previous interviewsDimon has said that the Federal Reserve may be far from ending its aggressive regime of interest rate hikes in its fight against high inflation, and that the central bank is likely to continue raising rates by another 1.5 percentage points, up to 7%.
Geopolitical problems
Dimon emphasized that this may be the most dangerous time the world has seen in decades, and that wars in Ukraine, Israel and Gaza could have far-reaching impacts on energy and food supplies, trade and geopolitical relations. It could even, he claimed, lead to “nuclear blackmail.”
Humanity faces enormous risks, he said. One of them is, obviously, the war in Eastern Europe and the Middle East. But beyond that, Dimon is concerned about nuclear proliferation, climate change and the risk of another pandemic.
The United States, he said, needs to ensure it has “the best military in the world, bar none.” It’s a costly undertaking, he said, but the stakes are high: “It’s about keeping the Western world together,” he said at the event. “We need American leadership to make sure this all stays together. “I don’t want a book written in 50 years about how the West lost.”
Business in China
JPMorgan Chase does business with TikTok parent company ByteDance and is partially funding the planned initial public offering of Chinese fast fashion company Shein, according to a recent report from Archyde.com.
Dimon said Wednesday that he will follow the lead of the U.S. government when it comes to doing business in China, but that he believes companies like Shein do not pose a threat to U.S. national security.
While some U.S. lawmakers have said TikTok is a national security threat, Dimon responded that JPMorgan Chase performs due process with all of its clients.
“I’m not afraid of China,” he said.
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