Yes, I think there is a chance it could happen again
– he said at a presentation at the Economic Club of New York on Tuesday, which was watched by Yahoo Finance.
In that troubled decade, the economy was constrained by stagflation — a combination of low growth and high inflation — and Dimon says that danger is back.
I worry that the current situation is more like the ’70s than anything before
– He told. He added that there are conditions that are distinctly reminiscent of the 1970s, more than anything in the last 20 years.
The CEO of America’s largest bank has been warning for months about a number of risks to the resilient US economy, which could lead to stickier inflation and higher interest rates than markets expected, as he outlined in his April 8 letter to shareholders.
Federal Reserve officials reinforced that view over the past week, as Fed Chairman Jerome Powell and several of his colleagues backed away from earlier interest rate cuts and made it clear that higher-than-expected inflation would likely keep rates on hold for longer than expected.
Dimon said in his April 8 letter that the bank was prepared for interest rates of “2% to 8% or more” — and he repeated that prediction on Tuesday.
We can also manage stagflation
he added.
Earlier this month, JPMorgan reported first-quarter results that showed higher interest rates are posing more of a challenge for even the nation’s largest bank.
Even though profits rose 6% from a year earlier, beating analysts’ expectations, the bank said a key source of income, called net interest income, came in lower than expected from the previous quarter. It was the first decline in this key revenue stream in nearly three years, and the bank attributed the drop to lower deposit margins and lower deposit volumes.
During Tuesday’s conversation, Dimon also returned to some other familiar topics, including his concerns about large government spending and efforts to reduce the Fed’s balance sheet, as well as the wars in the Middle East and Ukraine and their potential disruptions to key commodity markets, migration and geopolitics. to relationships.
Cover image source: Getty Images
