Jamie Dimon Weighs In on US Recession Risks, Urges Fed Caution

Jamie Dimon, CEO of JPMorgan Chase & Co., has expressed caution regarding the prospect of a recession in the United States, suggesting that a soft landing is less likely than the market currently anticipates.

Speaking at the Australian Financial Review Business Summit in Sydney, Dimon stated that the world is currently pricing in a soft landing at around 70-80%, while he believes the chances of such an outcome in the next year or two are only about half that. He emphasized that the worst-case scenario could be stagflation.

Dimon noted that economic indicators have been distorted by the COVID-19 pandemic, urging the Federal Reserve to exercise patience before considering interest rate cuts. While he acknowledged the potential for the Fed to cut rates quickly if needed, Dimon stressed the importance of waiting for more clarity to maintain the central bank’s credibility.

Despite acknowledging the current strength of the US economy, which he described as “kind of booming,” Dimon highlighted the ongoing risk of a recession. His comments mark a nuanced perspective from the prominent banker, who, in the past, has alternated between optimistic and cautious views on the global economy.

Federal Reserve Chair Jerome Powell recently hinted at the central bank’s readiness to consider lowering interest rates, emphasizing the importance of confidence in sustained inflation at the 2% target. Dimon’s cautionary remarks contribute to the ongoing economic discourse, reflecting the complex and uncertain landscape facing financial markets.

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