The chief executive at JPMorgan Chase offered a grim financial outlook on Wednesday, warning of an economic “hurricane” and advising those listening that “you better brace yourself.”
“It’s a hurricane. Right now, it’s kind of sunny, things are doing fine. Everyone thinks the Fed can handle this,” Jamie Dimon said during a financial conference.
“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 or Andrew or something like that, and you better brace yourself,” he added.
The JPMorgan Chase chief executive spotlighted two issues he was concerned about: the Russia-Ukraine war and how it is affecting rising prices for fuel and food, and the Fed’s efforts to raise interest rates and reduce its balance sheet to tackle inflation, according to CNBC.
Dimon said “wars go bad” in suggesting that the Fed’s interest rate hikes could backfire and lead to a recession.
He also said the U.S. should do more to protect European economies that are being hurt by the fighting over Russia’s oil and gas supplied.
“We’re not taking the proper actions to protect Europe from what’s going to happen to oil in the short run,” he said.
The chief executive’s remarks come as the United States grapples with decades-high inflation, a nagging COVID-19 pandemic that has disrupted supply chains and further constraints on the global economy from the Russian invasion of Ukraine.
The Biden administration and the Fed have come under criticism for not doing more earlier to tackle inflation.
Treasury Secretary Janet Yellen conceded in an interview with CNN on Tuesday that she was “wrong” about the trajectory of inflation following comments she made in 2021 that suggested it would be a “small risk.”
“Well, look, I think I was wrong then about the path that inflation would take,” the Treasury secretary said when asked about her comments from 2021.
“As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t — at the time didn’t fully understand. But we recognize that now.”