Tags: JPMorgan | Double | Dip | Recession

JPMorgan CEO Dimon: Threat of Double-Dip Recession Has Faded

Thursday, 29 Mar 2012 07:34 AM

The threat of a double-dip recession is a thing of the past, and even the ailing housing sector is starting to turn around support the overall economy, says Jamie Dimon, CEO of JPMorgan Chase.

The economy is poised to continue growing, and banks are planning for more growth, and not for a return to recession.

"No one can forecast the economy with certainty," Dimon tells CNBC, "but most of us in business [have] got growth plans that have nothing to do with the actual state of the economy."

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Housing is starting to pick up even as prices bounce along the bottom, a sign the only direction from here is up.

"I believe we’re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green," Dimon says.

The U.S. economy is growing and the economy continues to add jobs albeit at a pace deemed sluggish by the government.

The Federal Reserve has said economic conditions warranting today's low interest rates of near zero percent will likely stick around through 2014, although for Dimon, that policy probably reflects the Fed's goal of seeing the labor market strengthen, in line with its mandate, and not due to an overly weak economy.

"I think they want to see 300,000 to 400,000 jobs a month for six months before they declare victory" and raise rates, Dimon says.
The economy added a net 227,000 jobs in February.

Fed Chairman Ben Bernanke insists loose monetary policies must stay in place.

On top of slashing interest rates, the Fed has bought $2.3 trillion in bonds such as Treasurys or mortgage-backed securities from banks to juice the economy and encourage hiring, moves that critics say will fuel inflationary pressures down the road.

Bernanke has said such policies are needed and adds the economy must grow at a faster clip for unemployment rates to fall, as current hiring reflects companies refilling posts made vacant during recession-time layoffs, but new hiring for new business remains at bay.

"Further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics.

Markets interpreted such comments to mean more stimulus measures may roll out down the road or at least considered, which Bernanke reiterates cannot be ruled out.

"Well, we don't take any options off the table," Bernanke told ABC News.

"We don't know what's going to happen in the future, and we have to be prepared to respond to however the economy evolves."

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Thursday, 29 Mar 2012 07:34 AM
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