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JPMorgan’s Dimon hopes for soft landing for US economy but says stagflation is a possible scenario


Ken Sweet, Associated Press

19 minutes ago

FILE - Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., listens during a Senate Banking, Housing and Urban Affairs Committee oversight hearing examining Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington.  Dimon says stagflation could be one of a number of possible outcomes for the economy as the Fed tries to tame stubbornly high consumer prices, Friday, April 26, 2024. (AP Photo/Alex Brandon, File)

FILE – Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., listens during a Senate Banking, Housing and Urban Affairs Committee oversight hearing examining Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023, in Washington. Dimon says stagflation could be one of a number of possible outcomes for the economy as the Fed tries to tame stubbornly high consumer prices, Friday, April 26, 2024. (AP Photo/Alex Brandon, File)

NEW YORK (AP) — JPMorgan Chase CEO Jamie Dimon says he hopes the Federal Reserve can lower inflation without causing a recession, but he does not rule out more troubling possibilities, such as stagflation.

In an interview with The Associated Press at the opening of a Chase branch in the Bronx, Dimon said he remains “cautious” about the U.S. economy, said inflation could be more persistent for longer and that “stagflation is on the list of possible things” that could happen. to the American economy.


“You should be worried about (the possibility of stagflation),” Dimon said.

Dimon stressed that he remains “optimistic” that the US economy will see a soft landing, where growth slows but the economy avoids a recession even if inflation remains slightly elevated, but he is not sure that is the most likely outcome.

“I’m a little more skeptical than others that (a soft landing) is a given,” he said.

The Fed quickly raised interest rates in 2022 and 2023 after inflation reached the highest level in four decades. Fed officials have indicated they expect to start cutting interest rates at some point, but the timeline has been pushed back as inflation remains well above the central bank’s target rate of 2%.

Dimon spoke to the AP about a range of issues, including the independence of the Federal Reserve, the health of the American consumer, the need for banks to open branches, and the pressing geopolitical issues of the moment.

Inflation has been stubbornly high so far this year, and a report released Thursday showing growth slowed in the first three months of this year raised fears of “stagflation,” which occurs when the economy is weak, or in recession, and with… So prices continue to move upward. It’s a particularly miserable mix of economic conditions, with high unemployment rates coupled with rising costs. Typically, a slow economy leads to low inflation.

The last time stagflation occurred was in the 1970s, when conditions were much worse than they are today. In 1975, for example, the inflation rate exceeded 10% while the unemployment rate peaked at 9%. The inflation rate is now 3.5%, and the unemployment rate is only 3.8%, which is close to its lowest level in half a century. If stagflation occurs, Dimon said he believes it will not be as bad as it was in the 1970s.

Stagflation fears eased on Friday after a government report showed that consumer spending remained strong in March, suggesting the economy will continue to expand at a strong pace in the coming months.

Dimon also stressed the need for the Fed to remain independent, following a Wall Street Journal report this week that said former President Trump’s advisers were considering ways to limit the Fed’s independence, and he should be elected again. Steps could include removing the Fed head by the president or requiring the president to consult with him on any changes in interest rates.

“I don’t know what these people are thinking, or how they think they’re going to do this,” Damon said, saying any changes would likely require legislation.

Chase opened its 17th branch in the Community Center on Friday. These are larger branches designed for low to moderate income areas. They are designed with multi-purpose areas to conduct workshops and financial literacy for communities in need.

Glynis Arias, 43, lives in the Bronx and works as an Uber driver. She’s been doing business with Chase for six months and said she usually comes in to use the ATM, cash checks and check her credit score.

She said that the branch met her needs and she had not heard about the expansion, upcoming classes or events. “I knew nothing about it, but I came for it,” she said of programming.

In off-hand remarks, Dimon pointed to the constant flow of customers.

“I love the fact that a lot of people walk in here. A lot of people are nervous about how they will be treated when they walk into a bank branch.



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