Jamie Dimon, chairman and chief govt officer of JPMorgan Chase & Co., speaks throughout the Institute of International Finance (IIF) annual membership assembly in Washington, DC, US, on Thursday, Oct. 13, 2022.
Ting Shen | Bloomberg | Getty Images
JPMorgan Chase CEO Jamie Dimon stated Monday that whereas the U.S. economic system is doing nicely, it could be a “large mistake” to imagine that it’ll final for years.
Healthy client stability sheets and rising wages are supporting the economic system for now, however there are dangers forward, stated Dimon, who was talking at a monetary convention in New York. Topping his considerations embody central banks reining in liquidity applications through “quantitative tightening,” the Ukraine warfare, and governments all over the world “spending like drunken sailors,” the chief stated.
“To say the patron is robust immediately, which means you’re going to have a booming atmosphere for years, is a big mistake,” he stated.
The world’s largest economic system has defied expectations for a downturn for the previous yr, together with from prognosticators like Dimon, head of the largest U.S. financial institution by belongings. Last yr, he warned {that a} potential financial hurricane was on the best way, citing the identical considerations round central banks and the Ukraine battle. But the U.S. economic system has confirmed resilient, main extra economists to count on {that a} recession may be prevented.
“Businesses really feel fairly good as a result of they take a look at their present outcomes,” Dimon stated. “But these issues change, and we do not know what the complete impact of all that is going to be 12 or 18 months from now.”
While JPMorgan and different banks have been “over-earning” on lending for years due to traditionally low default charges, strains have been rising in components of actual property and subprime auto lending, Dimon stated.
“If and when you have got a recession, which you are finally going to have, you will have an actual regular credit score cycle,” Dimon stated. “In a traditional credit score cycle, one thing all the time does worse than” anticipated, he added.
Dimon on laws, markets, China
Dimon struck a notice of warning all through the panel dialogue. JPMorgan is repurchasing inventory at a “decrease degree” than earlier than, a tempo which could final via 2024, he stated, because the financial institution husbands capital to stick to approaching guidelines.
He referred to as the brand new regulatory mandates “massively disappointing” and pushed for better transparency from regulators, saying that JPMorgan must maintain about 30% extra capital than European banks.
“Is that what they need? Is that good, long run?” Dimon requested. “What was the goddamn level of Basel within the first place?”
When requested about whether or not the IPO and merger markets have been selecting up given the upcoming Arm itemizing, Dimon stated he inspired CEOs to take motion quite than ready too lengthy.
“I believe the uncertainties on the market forward of us are nonetheless very giant, and really harmful,” Dimon stated.
Among these dangers is the deterioration in relations with China, he stated. Prospects for JPMorgan operations in China went from trying vibrant to solely “simply OK” due to the rising dangers, he stated.
“I do not count on warfare in Taiwan, however this may go south,” Dimon stated.
