OAN’s James Myers
9:33am – Monday, April 8, 2024
JPMorgan Chase & Co. Chief Executive Jamie Dimon has warned that U.S. interest rates could rise above 8% in the next few years as the record plunge in U.S. debt makes it harder to contain inflation. .
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“The massive government spending, the trillions of dollars needed each year for a green economy, the remilitarization of the world, and the restructuring of global trade are all inflationary,” Dimon said in his annual letter to JPMorgan shareholders released Monday. I mentioned it in.
But Dimon told investors that while he believed the Fed would avoid a “soft landing” by controlling inflation without causing a recession, he was prepared for a far more worrying outcome. .
“These markets appear to be pricing in a 70% to 80% chance of a soft landing,” Dimon said in a previously reported letter. wall street journal. “I think the odds are much lower than that.”
“The worst-case economic scenario would be stagflation,” he said, adding that the economy would stagnate, leading to “not just higher interest rates, but higher credit losses, lower trading volumes and more difficult market conditions.” Probably,” he added.
He also said that today’s budget deficits are “much higher, are not the result of a recession, but occur during booms, and have been supported by quantitative easing, which was not done before the Great Financial Crisis.” Stated.
The JPMorgan Chase CEO also talked about the idea that artificial intelligence will impact the economy and the rest of the world.
“We have full confidence that the results will be extraordinary, perhaps as transformative as any major technological invention of the past several hundred years, including the printing press, the steam engine, electricity, and computer technology.” “Think of the Internet,” he writes. .
Additionally, consumer prices have not declined year-over-year since President Joe Biden took the White House in 2021.
Additionally, the closest the economy came to negative annual growth since President Biden took office was in July 2022, when inflation remained unchanged at 8.5%.
Also, prices have increased an eye-popping 19% since December 2020. Biden claimed his economic policies would “reduce the government deficit” a month before he took over the White House.
Hedge fund billionaire Ken Griffin wrote in a letter to shareholders last week that if the U.S. continues to rack up debt and slides deeper into trouble, future generations will face dire consequences. He said he was deaf.
“The rapid rise in U.S. public debt is a growing concern that cannot be ignored,” Griffin, Citadel’s founder and CEO, said in a year-end 2023 letter to investors released last Monday. ” he said. “We must stop borrowing money at the expense of future generations.”
“It would be irresponsible for the U.S. government to incur a 6.4% budget deficit when the unemployment rate is hovering around 3.75%,” he said.
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