OAN’s James Meyers
9:33 AM -Monday, April 8, 2024
JPMorgan Chase chief Jamie Dimon warned that U.S. interest rates could increase over 8% in the next few years, with record toppling U.S. debt has made it complicated to keep inflation down.
“Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world and the restructuring of global trade — all are inflationary,” Dimon wrote in his annual letter to JPMorgan shareholders released Monday.
However, Dimon told investors that he believed the Federal Reserve will avoid a “soft landing” by keeping inflation down without causing a recession, but said that he is prepared for a far greater concerning outcome.
“These markets seem to be pricing in a 70% to 80% chance of a soft landing,” Dimon wrote in his letter earlier reported on by The Wall Street Journal. “I believe the odds are a lot lower than that.”
“Economically, the worst-case scenario would be stagflation,” which would see the economy staying stagnant and “would not only come with higher interest rates but also with higher credit losses, lower business volumes and more difficult markets,” he added.
He also said that the deficits today, “are even larger and occurring in boom times – not as the result of a recession – and they have been supported by quantitative easing, which was never done before the great financial crisis.”
The JPMorgan Chase CEO also discussed the idea of Artificial Intelligence having an impact on the economy, and the rest of the world.
“We are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others,” he wrote.
Additionally, consumer prices have not decreased year-over-year since President Joe Biden began his stint at the White House in 2021.
Furthermore, the closest the economy has ever gotten to a yearly decrease since Biden took office was in July 2022, when the inflation rate remained the same, at a staggering 8.5%.
Prices are also up an eye-popping 19% since December 2020, which was one month before Biden took over the White House, who has claimed his economic policies would “reduce the government’s deficit.”
Ken Griffin, who is a hedge fund billionaire, stated in a letter to shareholders last week that future generations will face dire consequences if America continues to increase the debt and go further into the hole.
“The surging US public debt is a growing concern that cannot be overlooked,” Griffin, founder and CEO of Citadel, penned in his 2023 year-end investor letter released last Monday. “We must stop borrowing at the expense of future generations.”
“It is irresponsible for the US government to incur a deficit of 6.4% when unemployment is hovering around 3.75%,” he wrote.
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