JPMorgan CEO Dimon ‘skeptical’ of ‘Goldilocks’ economic scenario

JPMorgan Chase & Co. Chief Executive Jamie Dimon said Tuesday that he remains “skeptical” of the “Goldilocks” economic scenario, or long-awaited soft landing, that financial markets are currently largely expecting for the U.S. economy. He said that there is.

“I'm a little bit skeptical of this kind of Goldilocks-like scenario. I still think there's a better chance than most that it won't be a soft landing,” Dimon told Fox Business. He spoke on the network's “Morning with Maria.”

“It's not terrible,” he continued. “It could be a mild recession or it could be a deep recession.”

Financial markets, and even Treasury Secretary Janet Yellen, seem fairly confident that the economy has achieved a soft landing, as inflation has eased significantly over the past year without causing a recession.

Inflation has been steadily declining since reaching a 40-year high of 9.1% in June 2022, with consumer prices rising just 3.1% year-on-year in November, the latest figures show. .

Inflation remains above the Federal Reserve's 2% target, but the central bank has kept interest rates unchanged for the past three consecutive meetings, nearing the end of a long campaign to raise rates aimed at reining in inflation. suggests that it is possible.

Despite repeated rate hikes by the Federal Reserve, the economy has remained surprisingly resilient, defying widespread expectations of a recession.

But Dimon said the Fed's quantitative tightening program could still “catch in” as consumer surplus cash from the coronavirus pandemic is drying up and interest rates remain high. said he still believes there is a chance of a recession this year.

“With all of these factors, it's very likely that we're going to end up in a recession rather than a soft landing,” he told Fox Business' Maria Bartiromo.

Dimon also pointed to the current geopolitical situation, including the nearly two-year-old war in Ukraine and the ongoing conflict between Israel and Hamas, which threatens to escalate into a broader Middle East war.

“All of these things affect oil, gas, food, immigration, all kinds of economic relationships around the world,” Dimon said. “I think geopolitics is something that we shouldn't focus on this year. “We believe that there will be no impact,” he added. effect. “