Source: Business Standard
JP Morgan CEO Jamie Dimon notified the investors to support a potential economic ‘hurricane’. He said, Russian invasion of Ukraine, Runaway inflation and huge interest rate hikes, are the indicators.
JPMorgan Chief Executive Dimon’s view on the upcoming recession
JPMorgan Chase Chief Executive & President Jamie Dimon asserts his observations in a CNBC interview, this Monday. He testified, in the mid- 2024, the U.S. as well as the global economy might witness a recession spike. The conveyance occured on “Annual Oversight of the Nation’s Largest Banks” placed in a hearing of Senate Banking, Housing, and Urban Affairs in Washington, U.S.
The significant banks of the US have prepared their report related to third-quarter earnings, which has been disclosed in this event. The buybacks of suspended shares has caused Dimon’s futuristic view prominently as in July those have missed quarterly expectations of Wall Street.
Dimon mentioned about the S&P that their 500 might view the fall by “another easy 20%” from the current levels, with the next 20% slide likely to be much more painful than the first ”. This comment has led to the benchmark of the S & P 500 index this year, which has lost nearly 24%. While he admitted the singular guarantee was his observations about the volatile markets. The warnings confirmed the coincident financial conditions which may act disorderly.
Source: The Economic Times
“These are very, very serious things which I think are likely to push the US and the world — I mean, Europe is already in recession — and they’re likely to put the US in some kind of recession six to nine months from now,” Dimon said. His statements claimed that the unknown impact of quantitative tightening powered by the Federal Reserve can be granted as a catalyst to this upcoming recession. Dimon couldn’t give any surety of the duration of sustaining the huge recession in the U.S. The market participants need to assess the wide range of after effects on this situation instead.
Outlook of major US banks and Think tanks explained by Charles Dimon
President of Chicago Federal Reserve, Charles Evans shared his thoughts of feeling apprehensive regarding central banks of the U.S. He remarked in a past interview with CNBC that they were trying to reach huge numbers too fast, which might affect excessive inflation rates. While Dimon said the Fed “waited too long and did too little”. Such remarks of his occurred as the inflation has jumped into four-decade highs as well as it can be seen that the central bank is trying to make up with the situation utmost.
Dimon presumed “And, you know, from here, let’s all wish him success and keep our fingers crossed that they managed to slow down the economy enough so that whatever it is, is mild — and it is possible,”.
On the other hand, the President of the World Bank, David Malpass along with the Managing Director of the International Monetary Fund Kristalina Georgieva has asserted their field of vision regarding the growing risk of the upcoming potential global recession.
They have also mentioned the Russian invasion as an indicator of this matter. A veteran market analyst, Edward Moya at OANDA shared his concerns by asserting that “There’s still a good amount of strength in the labor market and that’s going to allow the Fed to remain aggressive in fighting inflation,”.
EJ Antoni, who works as a The Heritage Foundation’s research fellow added his concerns as popular being a conventional think-tank, “That increases costs, not just for energy, but everything we do and everything we buy and so the price of everything goes up, including food,”.
The gross domestic product(GDP) of the US has contracted nearly 0.6 percent as per the measure of goods as well as services output in the last quarter. This happened after observing the shrink of 1.6 percent between January and March and impacted the rule of thumb as in case of recessions, quarterly GDP declines in a consecutive manner.
Current scenario by Biden administration
The deficit in US trade has shrunk to the lowest level this August as well as last week Goldman Sachs boosted the third quarter estimation of the US’s GDP with a complete percentage point along with a 1.9 % year-by-year rate.
Although the US administration has continued their declaration of speaking about the economy, which is resilient to them. It can be seen that the unemployment rate has been the lowest compared to five decades as well as unwavering the confidence of consumers is a major discussion here too.
A poll held by Bankrate, which is a financial firm, solely based inn NY, has shown, nearly 70 % of Americans have recently expressed their worry regarding the coming recession. While, 40% seemed to be confused a financially unprepared to accommodate themselves to the situation, which might hit in the middle of 2024.
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