JPMorgan Chase CEO Jamie Dimon says the U.S. banking disaster isn’t over and “there shall be repercussions from it for years to return.” The manager added that latest financial institution failures “have considerably modified the market’s expectations,” and the chances of a recession have elevated.
JPMorgan CEO Jamie Dimon on U.S. Financial system, Recession, and Banking Disaster
Jamie Dimon, chairman and CEO of JPMorgan Chase, shared his considerations concerning the U.S. financial system, recession, and the banking disaster in his annual letter to shareholders, revealed final week. The letter adopted the latest collapse of a number of main banks within the U.S., together with Silicon Valley Financial institution and Signature Financial institution. Calling latest financial institution failures a “banking disaster,” Dimon warned:
The present disaster isn’t but over, and even when it’s behind us, there shall be repercussions from it for years to return.
“Current occasions are nothing like what occurred in the course of the 2008 international monetary disaster (which barely affected regional banks),” the JPMorgan boss defined. “At the moment, there was huge leverage just about in every single place within the monetary system.” In distinction, he famous: “This present banking disaster entails far fewer monetary gamers and fewer points that should be resolved.”
Commenting on the Federal Reserve’s efforts to curb inflation and future take hikes, Dimon opined:
If now we have larger inflation for longer, the Fed could also be pressured to extend charges larger than individuals anticipate regardless of the latest financial institution disaster.
As well as, he cautioned that quantitative tightening (QT) “might have ongoing impacts that may, over time, be one other pressure, pushing longer-term charges larger than at the moment envisioned. This will happen even when now we have a light — or not-so-mild — recession, as we noticed within the Seventies and Nineteen Eighties.”
Dimon defined that the failures of Silicon Valley Financial institution and Credit score Suisse “have considerably modified the market’s expectations, bond costs have recovered dramatically, the inventory market is down, and the market’s odds of a recession have elevated.” He emphasised:
Whereas that is nothing like 2008, it’s not clear when this present disaster will finish.
Nonetheless, the JPMorgan government insisted that the present financial system is “fairly good” however reiterated that there are “storm clouds forward.”
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