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Tags: jamie dimon | interest rates | economy | letter | u.s. | debt | global

Dimon on 8 Percent Interest Rates: Racing Off the Cliff

By    |   Monday, 08 April 2024 09:24 PM EDT

CEO of JPMorgan Chase & Co., Jamie Dimon, expressed concerns that the United States interest rates might soar to more than 8% in the near future due to a combination of record debt and the ongoing global conflicts.

"Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world, and the restructuring of global trade — all are inflationary," Dimon said in his annual letter to shareholders, according to the New York Post.

Rebuking the optimism of the Federal Reserve achieving a so-called "soft landing" — cooling inflation without triggering a recession — Dimon argued, "These markets seem to be pricing in at a 70% to 80% chance of a soft landing. I believe the odds are a lot lower than that."

"Economically," he added, "the worst-case scenario would be stagflation," which "would not only come with higher interest rates but also with higher credit losses, lower business volumes, and more difficult markets."

Despite these daunting challenges, Dimon reassured shareholders about JPMorgan's resilience, referencing the bank's nearly $50 billion in profits last year and asserting that the bank would "continue to perform at least OK."

This economic caution is mirrored in the actions and statements of the Federal Reserve. Despite a series of interest rate hikes, inflation remains stubbornly high, with the Fed struggling to bring it below 3%. Federal Reserve Governor Michelle Bowman recently hinted at the possibility of further rate hikes, diverging from earlier predictions of rate cuts this year. Bowman stated, "While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse."

The issue of persistent inflation is underscored by the Consumer Price Index, which reported a 3.2% increase in February. Since President Joe Biden took office, consumer prices have not experienced a year-over-year decrease, with prices having surged by 19% since December 2020.

Adding to the chorus of concern, Dimon has repeatedly highlighted the urgent need to address the U.S. debt crisis, cautioning in January, "It is a cliff, we see the cliff. It's about 10 years out, we're going 60 miles an hour [toward it]."

Echoing Dimon's sentiment, hedge fund billionaire Ken Griffin criticized the growing U.S. public debt in his own shareholder letter, stating, "The surging US public debt is a growing concern that cannot be overlooked. We must stop borrowing at the expense of future generations."

Nick Koutsobinas

Nick Koutsobinas, a Newsmax writer, has years of news reporting experience. A graduate from Missouri State University’s philosophy program, he focuses on exposing corruption and censorship.

© 2024 Newsmax. All rights reserved.


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CEO of JPMorgan Chase & Co., Jamie Dimon, expressed concerns that the United States interest rates might soar to more than 8% in the near future due to a combination of record debt and the ongoing global conflicts.
jamie dimon, interest rates, economy, letter, u.s., debt, global, conflicts
411
2024-24-08
Monday, 08 April 2024 09:24 PM
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