Jamie Dimon, the CEO of JPMorgan Chase, issued a warning on Tuesday about the dangers of the economic outlook, especially considering the recent "bad records" of central banks such as the Federal Reserve.
Damon said that about 18 months ago, the financial forecasts of central banks around the world were "100% wrong", which should encourage people to remain humble about the prospects for next year. The head of the largest bank in the United States with assets has issued the latest warning on the future situation, warning that various factors that have emerged have made things even more difficult.
During a panel discussion at the "Future Investment Initiative" summit held in Riyadh, Saudi Arabia, Damon expressed doubts about whether central banks and governments around the world can cope with the economic impact of rising inflation and slowing global economic growth. He said, "Be prepared for various possibilities and probabilities, rather than specifying a course of action
These comments can be traced back to the Federal Reserve's outlook in early 2022 and most of the previous year, when officials insisted that the surge in inflation would be "brief". In addition to the "misdiagnosis" of prices, according to predictions released in March 2022, Federal Reserve officials unanimously believe that its key interest rate will rise to 2.8% by the end of 2023, but currently stands at 5.25%. At that time, the Federal Reserve expected a core inflation rate of only 2.8% by the end of 2023, which was 1.1% lower than the current actual figure.
He said in a discussion led by David Rubenstein, co founder of the Carlyle Group, "Fiscal spending has exceeded peacetime levels, and people have an omnipotent feeling that central banks and governments can manage everything. I am cautious about what will happen next year
Damon compared today's situation to the global economy of the 1970s, when consumption was high, waste was severe, and the impact of further interest rate hikes was offset.
Many people on Wall Street are concerned about whether the Federal Reserve will raise interest rates by another 25 basis points before the end of 2023, but Damon said, "I don't think there's any difference in raising interest rates by 25 basis points or more. Whether the entire curve rises by 100 basis points or not, it's important to be prepared. I don't know if this will happen." Damon recently warned that the Federal Reserve's federal funds rate may break through 7%.
Damon also criticized policymakers' approach to addressing climate change, comparing current efforts to an inefficient "ground hog" game with almost no clear strategy. He said, "We will make the necessary breakthroughs, but due to our own basic abilities, this will be later and longer than we imagine
He said, 'I have always been an optimist overall,' but he added, 'I think it would be foolish not to look at some of the things that happened in Ukraine and the Middle East today.'. Obviously, I feel heartbroken for Ukraine, but it also affects oil, food, food prices, natural gas prices, immigration, and potential hunger - which may be the most serious problem we face In early October, Damon issued a statement during JPMorgan Chase's financial report stating that "this may be the most dangerous moment in the world in decades".
This senior financier emphasized the seriousness of nuclear weapons proliferation and placed it ahead of climate change and other widely mentioned threats. Damon said, "I often hear people talk about ESG. I just want to say that the most serious problem facing humanity is nuclear proliferation. If we don't sit here in 100 years, it's because of nuclear proliferation, not climate issues
In the same group discussion, Ray Dalio, CEO of Bridgewater Fund, also voiced a pessimistic tone, stating that his outlook for the global economy in 2024 is "pessimistic" and listing some risks such as high public debt, conflicts, and chaos.