Three days after Jamie Dimon triggered a market-wide sell-off which sent stocks to fresh 2022 lows after predicting a US recession in ‘6 to 9’ months, citing factors including rising interest rates, lingering inflation and the invasion of Ukraine by Russia, and warned that shares could fall another 20%, JPMorgan’s CEO who is expected to report earnings tomorrow (and hopefully clarify why his bank refuses to move its deposit rate above 0.01% in the process by keeping $2.2 trillion of cash locked away in the Overnight Funding Facility), doubled down today saying the Fed can’t cool the red-hot economy without causing of recession.
“I don’t know if it could be a soft landing – I don’t think so, but it could be,” the JPMorgan CEO told an industry conference in Washington on Thursday. , adding that the alternatives would be a soft landing or a severe recession. “In a tough recession, you can expect the market to fall another 20% to 30%,” adding another 10% to the figure he announced on Monday.
Things got worse: In addition to predicting a hard landing and a 30% crash, the CEO of America’s largest bank also said his “gut” was telling him that the fed funds rate would likely have to rise above the level of 4% to 4.5%. predict many economists, because inflation persists.
Still, Dimon said he has “complete faith and confidence” in Fed Chairman Jay Powell and that stagflation is far worse than most other potential outcomes as the Fed scrambles to calm down. price pressures.
And in a sign that the markets may be getting ahead of themselves, Dimon also said the consumer could be strong for another nine months (around when the recession hits). In other words, Dimon, who warned of recession and another stock market crash, also repeatedly stressed that consumers are still healthy. We’re sure Jamie will let us know when he thinks consumers will finally crash.
Some other notable statements from Jamie include:
- JPMorgan is sitting on $1.2 trillion in cash
- China can micro-manage growth at 3-4%
- CCAR broke away from reality (which we know because clearly no one could have predicted the UK pension fund crisis)
- Commodity prices around the world are very fragile
In separate – and far more provocative – comments made earlier today at a JPMorgan investor seminar where he led a fireside chat moderated by JPMorgan’s Gergana Thiel, Dimon made extremely candid comments. which, however, you won’t hear in the mainstream media. , telling a small group of listeners that closed to the press that the “President of the United States needs to stand up and say we may not meet our 2050 climate goals because this is a fucking war”.
He also said “it’s time to stop going hat in hand to Venezuela and Arabia and start pumping more oil and gas into the United States.”
Echoing what he’s said before, Jamie said this is how the United States maintains its position, pumping more oil and gas and using energy security to ensure Western unity.
And he said when it comes to ESG “investors don’t care” warning not to “Surrender governance to the benevolent children of a committee”.
Finally, he stressed the need for strong American leadership which is not provided by either party. His conclusion: the world needs American diplomacy and neither Trump nor Biden can lead the United States.
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