"Even in a Recession, Consumers Remain Sound... Concerns Over Stagflation"
Warnings on Debt, Inflation, and Geopolitical Tensions
"No Intention to Run for President... Opponent Should Nominate Candidates"
Jamie Dimon, CEO of JP Morgan Chase and known as the "Emperor of Wall Street," evaluated that the U.S. economy is enjoying a boom but warned that caution is needed regarding the possibility of a soft landing.
According to foreign media including Yahoo Finance on the 23rd (local time), CEO Dimon said at the New York Economic Club event, "The economic situation in the U.S. is incredible. It has been booming for a while," and added, "Even if we enter a recession, consumers will still be in a healthy state."
Jamie Dimon, CEO of JP Morgan, is warning on the 23rd at the New York Economic Club event that the possibility of a soft landing should be considered cautiously. [Image source=Reuters Yonhap News]
This statement contrasts with concerns that the economy would slump due to the Federal Reserve's rapid interest rate hikes over the past two years.
CEO Dimon said, "The U.S. is maintaining a pretty good condition, and so far it looks like a soft landing scenario," but also stated, "However, I am cautious about the soft landing." He added, "The market will do whatever it takes to hurt most people." This was a phrase Dimon often used in the early days of Wall Street.
He also expressed concerns about the impact of rising national debt, inflation, and geopolitical conflicts. He warned that stagflation, where recession and inflation occur simultaneously, could happen again for the first time in about 40 years due to large-scale fiscal spending and debt. He pointed out, "The 1970s had deficits at about half the current level, and debt relative to GDP was only 35%," emphasizing that U.S. fiscal spending is currently a major driver of strong economic growth, and the result of a debt-sustained economy is inflation. The International Monetary Fund (IMF) estimated last year that U.S. government debt relative to GDP was 122%.
Earlier, in a shareholder letter on the 8th, he also emphasized the need to prepare for the possibility that interest rates could soar up to 8% and inflationary pressures could intensify.
Regarding the recent escalation of geopolitical tensions in the Middle East involving Israel, Iran, and Hamas, he mentioned the risk of attacks on energy infrastructure and said, "I am somewhat surprised that the oil and gas situation has not worsened."
Regarding past calls for him to run for president, he responded, "I have always said I want to be president, but you have to appoint me," which made the audience laugh. He then suggested, "Regardless of who becomes the next president, I hope they appoint opposition party members to the cabinet," adding, "I want to see professionals return to government and serve." Recently, CEO Dimon has been mentioned as a candidate for a senior position in the U.S. economic department.
About Indian Prime Minister Narendra Modi, he said, "He has done incredible things in India," and praised him for "lifting 400 million people out of poverty."
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