JP Morgan Chase & Co Chairman and Chief Executive Officer Jamie Dimon said that the challenges facing the US economy are to be compared to a “hurricane” that will land on America’s shores shortly, adding that the Federal Reserve needs to take direct measures to avoid a hard recession of the world’s largest and most powerful economy.
Dimon made the comments one day after President Joe Biden discussed inflation with the chair of the Federal Reserve, Jerome Powell.
JPMorgan CEO Jamie Dimon says there's a "hurricane" coming for the US economy and that "you better brace yourself" https://t.co/InCDVUx7Cz pic.twitter.com/LWFzjhxWR1
— Bloomberg (@business) June 1, 2022
“It’s a hurricane,” said Dimon at a conference on Monday. “Right now, it’s kind of sunny, things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or Superstorm Sandy,” he added.
Inflation is currently running at more than three times the 2 percent goal set by the Fed, sparking a stark increase in the cost of living.
“The Fed has to meet this now with raising rates and QT (quantitative tightening). In my view, they have to do QT. They do not have a choice because there’s so much liquidity in the system,” Dimon added.
Dimon is not the only fat cat warning Americans of economic turbulence.
Wells Fargo & Co CEO Charlie Sharf said that the Federal Reserve was going to have an extremely difficult task ahead of it as it tries to cool inflation with interest rate hikes.
“The scenario of a soft landing is … extremely difficult to achieve in the environment that we’re in today,” he said on Monday.
“The economy does need to slow in order to tame inflation. If there is a short recession, that’s not all that deep… there will be some pain as you go through it, overall, everyone will be just fine coming out of it,” he added.
“Corporations are still spending, where they can they’re increasing inventories … we do expect the consumer and ultimately businesses to weaken, which is part of what the Fed is trying to engineer but hopefully in a constructive way,” he added.
Biden has waged a war on inflation as his poll numbers continue to free fall.