JPMorgan Chase CEO Jamie Dimon said he stays cautious on the U.S. economy over the subsequent two years due to a mixture of monetary and geopolitical risks.
“You might have all these very powerful forces which can be going to be affecting us in ’24 and ’25,” Dimon told Andrew Ross Sorkin on Wednesday in a CNBC interview on the World Economic Forum in Davos, Switzerland.
“Ukraine, the terrorist activity in Israel [and] the Red Sea, quantitative tightening, which I still query if we understand exactly how that works,” Dimon said. Quantitative tightening refers to moves by the Federal Reserve to cut back its balance sheet and rein in previous efforts including bond-purchasing programs.
Dimon has advocated caution over the past few years, despite record profits at JPMorgan, the nation’s largest bank, and a U.S. economy that has defied expectations. Despite the corrosive impact of inflation, the American consumer has mostly remained healthy because of excellent employment levels and pandemic-era savings.
In Dimon’s view, the relatively buoyant stock market of recent months has lulled investors on the potential risks ahead. The S&P 500 market index rose 19% prior to now 12 months and is not removed from peak levels. Â
“I feel it is a mistake to assume that all the pieces’s hunky-dory,” Dimon said. “When stock markets are up, it’s form of like this little drug all of us feel prefer it’s just great. But remember, we have had a lot fiscal monetary stimulation, so I’m a little bit more on the cautious side.”
Goldman Sachs CEO David Solomon said Wednesday that while the market environment excluding geopolitical issues “feels higher today” than a 12 months ago, he was troubled by soaring U.S. debt levels.
“I’m very concerned concerning the growing debt,” Solomon said. “It’s a giant risk issue that we’ll should take care of and reckon with, it just may not occur in the subsequent six months.”
Dimon isn’t any stranger to dire predictions: In 2022, he warned investors of an economic “hurricane” ahead due to quantitative tightening and the Ukraine conflict.
In Wednesday’s wide-ranging interview, Dimon discussed his views on Ukraine, former President Donald Trump, immigration, business real estate and bitcoin.
“We now have to show the American public that that is about freedom and democracy for the free world, and that is why the battle is being fought,” Dimon said concerning the Ukraine conflict.
Read more: Jamie Dimon says ‘brace yourself’ for an economic hurricane attributable to the Fed and Ukraine war
