There Are Storm Clouds Ahead For The Economy, JPMorgan Chase CEO Says


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There are storm clouds ahead for the economy, JPMorgan Chase CEO says

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A banking crisis fueled by the recent collapse of Silicon Valley Bank and Signature Bank has increased the chances of a US recession, JPMorgan Chase CEO Jamie Dimon said in an exclusive CNN interview with Poppy Harlow on Thursday.


Speaking in his first interview since the collapse of the SVB, Dimon said that while the banking system is strong and sound, the recent turmoil around the financial system is “another weight on the scale” towards a recession.

“We see people cutting back a little bit, cutting back a little, and cutting back a little.” While banking chaos won’t necessarily cause a recession, he said, “it’s a recession.”

There are storm clouds ahead for the economy, Dimon said. The current Federal Reserve tightening regime, as well as higher, sticky inflation and Russ*a’s war on Ukra*ne, are the biggest risks he sees for the economy. But Dimon said he hopes for the strength of human capital in the United States.


“I am an energetic, stubborn free market and free enterprise capitalist,” Dimon said of supporting local entrepreneurship. “I think we should applaud free enterprise and sing about the benefits while we fix the flaws, not belittle it all.”

Aimon met with Harlow after the opening of a local chapter of Chase in Atlanta. Bank of Atlanta is Chase’s 16th branch, built with local communities and hosting free events, financial health workshops and skills training for local residents. Community affiliates also provide storefronts for small business pop-ups.

These branches, Dimon said, are not charitable in any way. They are good for business. “We need to invest in local communities,” he said. In part, it’s as simple as opening a savings account. “A lot of us had moms and dads who took us around to open our first accounts,” he said. “And then you see your money go from $84.75 to $85.17. It was like magic, this interest.”

Dimon said this is part of what he hopes to achieve with his community chapters.


“We don’t want people to be afraid to go into the branch here. Come as you are, bring your children and learn,” he said.

As part of this initiative, Chase hired a number of community managers with the specific goal of encouraging those who are not comfortable in a banking environment to come and inquire about their finances.

That role is critical, he says, and is often filled by regional mid-sized local banks, which is partly why SVB and Signature’s recent failures and the possibility of contagion have been so agonizing.

Dimon said he wasn’t sure if the US economy had survived the thick of the current banking crisis.


“I hope this gets resolved pretty soon,” he said.

Dimon said he didn’t know if more banks would fail this year, but he was quick to point out that the turmoil had nothing to do with the 2008 financial crisis. lots of leverage. We don’t have that.”

He also added that we have no major problems in our mortgage markets. “Nothing like this. And the American public shouldn’t think that way.”

Still, Dimon said, some banks can be allowed to fail. “Failure is normal,” he said. “You just don’t want that domino effect.”

Dimon warned that regional banks – and American consumers – should be “ready for higher (interest) rates for longer. I don’t know if it will happen, but be prepared for such a tide.”

There is a strong possibility that rates will stay high for longer, he said, and banks investing in Treasury bonds should be prepared for that possibility.

Lawmakers are increasingly concerned about the increase in the debt ceiling they themselves set at $31.38 trillion, which they reached in January. According to various analyzes, without new legislation, the US government default could come in the summer or early September.

But talks between Republicans in the House of Representatives and the White House continue to stall.

Dimon, who has been working closely with the White House and Congress on various economic issues this year, told Harlow there would be no default under his leadership. No, as long as I’m alive. Boy, we’re going to keep fighting this,” he said.

Dimon said he believes Congress will decide on the debt ceiling within the next few months.

Dimon said he believes Congress will decide on the debt ceiling within the next few months, but there could be additional economic issues before an agreement is reached.

“You will feel the pain before it happens,” he said of breaking the debt ceiling. As a potential default approaches, “you will see it in the markets and it will scare people,” he said.

However, “when I go to Washington, most people there know how serious it is and want to fix it.”

Dimon served on former President Donald Trump’s business council, and while he doesn’t think Trump’s indictment and criminal charges brought against the former president this week will affect the economy, he does think Trump has made good economic policies.

“There are good policies that he pursued,” Dimon Harlow said. “I think the tax reform has actually given America back a trillion dollars. The black community had the lowest unemployment rate in the last year of its life because it boosted the economy.”

That’s not an endorsement, he quickly added. “This is not his support. It just goes to show that it’s true.”

Dimon also commented on another potential 2024 Republican presidential nominee, Florida Gov. Ron DeSantis.

Last year, Florida passed a law restricting discussion of LGBTQ issues in Florida schools, a bill that opponents called the “Don’t Say Gay” law. Disney objected to the law, and the state of Florida has since taken action to strip Disney of some of the powers it held over the land that includes and surrounds Disney World.

These actions prompted Disney CEO Bob Iger to call DeSantis’ actions and the law “anti-business”.

Dimon said Thursday that “we are aggressively and actively supporting the LGBT community” and confirmed that he will continue to do so despite DeSantis.

Read full transcript Here.


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