The CEO of JP Morgan Chase & Co, Jamie Dimon, has assured that an economic “hurricane” is approaching motivated by the tightening of monetary policy due to the war in Ukraine. This Wednesday, at a conference sponsored by Alliance Bernstein Holdings, he assured that the “hurricane is headed our way” and has warned US citizens that “they had better prepare,” according to Bloomberg.
Dimon already warned in May that there were “storm clouds” surrounding the US economy. But today he has corrected his economic forecasts: “I said there were storm clouds, big storm clouds. it’s a hurricane”. Shares of JP Morgan, one of the largest financial services companies, have fallen 1.8% on the New York Stock Exchange following Dimon’s comments.
JP Morgan lowers its growth prospects
In fact, the company’s own economists lowered their growth outlook last month: from 3% to 2.6% for the second half of 2022, from 2.1% to 1.5% for the first half of 2023 and from 1.4% to 1% for the last six months of 2023. Dimon He explained that his company is preparing for “turbulence”, being conservative and taking action “with all this uncertainty”.
For Dimon, the current situation is one of the biggest setbacks for the US economy, which will be accentuated due to the quantitative hardening process (QT) beginning this June at the Federal Reserve (Fed). “We’ve never had a QT like this, so you’re looking at something you could be writing history books for 50 years“, assured the CEO of JP Morgan.
As Forbes explains, the Fed is under pressure to curb inflation, which in April stood at 8.3%. It is the Fed that carries out the quantitative adjustments to cushion demand. The goal is to prevent prices from rising further without triggering a recession. “The Fed has to deal with this now with a rate hike and QT. In my opinion, they have to do a QT. They have no other option because there is a lot of liquidity in the system”, explained Dimon.