Jamie Dimon, the chief of JPMorgan Chase, issued a warning concerning U.S. interest rates, stating that they could end up surging over 8 percent over the course of the coming years as our nation’s debt hits record highs, coupled with a number of ongoing conflicts on the geopolitical conflicts make it more difficult to bring inflation levels down. That’s not exactly the kind of good news we want to hear, but that’s where our economy is at the moment, which is why it’s critical to remove Joe Biden from the presidency and get Trump in office.
“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 went on to write in his annual letter to JPMorgan shareholders which was released on Monday.
While Dimon informed his investors that he fully expects the Federal Reserve to do some footwork to avoid a “soft landing,” which is done by carefully bringing down inflation rates without causing a recession, however he’s also been taking steps to get himself ready for a potentially more worrisome outcome, according to the New York Post.
“These markets seem to be pricing in a 70% to 80% chance of a soft landing,” Dimon stated later on in the letter according to a report by The Wall Street Journal. “I believe the odds are a lot lower than that.”
Here’s more from the NY Post:
“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.
Still, Dimon said JPMorgan — the biggest bank in America by asset size — “would continue to perform at least okay,” and pointed to the Wall Street giant’s record of nearly $50 billion in profits last year. Despite a sharp rise in interest rates in recent years, the Fed hasn’t even been able to get inflation under 3%.
In a turnaround from policymakers’ earlier statements that there would be three interest-rate cuts this year, Fed Governor Michelle Bowman said on Friday that interest rates may even move higher.
“While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse,” Bowman remarked a set of prepared comments made to a group of Fed watchers in New York last Friday.
“Reducing our policy rate too soon or too quickly could result in a rebound in inflation, requiring further future policy rate increases to return inflation to 2% over the longer run,” she continued, according to CNBC.
Per the latest Consumer Price Index — which tracks changes in the costs of everyday goods and services — inflation rose 3.2% in February, yet another stubbornly high figure that doesn’t inspire interest rate cuts.
Consumer prices haven’t come down year-over-year since Biden took over the Oval Office back at the start of 2021. The closest we’ve come to getting a yearly decrease since this administration started was in July 2022, when the inflation rate did not change, remaining at a mind-blowing 8.5 percent.
Prices for goods are up 19 percent since December 2020, which is the month just before Biden dropped his bags off in the White House and despite all of the claims that his Bidenomics agenda is working to “reduce the government’s deficit,” this is not even remotely accurate. Not. Even. A. Little.
However, Treasury data shows the red ink topped $1.7 trillion in 2023 — a sum that nearly doubled over the course last year. Dimon has also sounded the alarm that the US debt needs to be tackled before it results in a crisis.
“It is a cliff, we see the cliff,” Dimon stated during an interview with Fox in January. “It’s about 10 years out, we’re going 60 miles an hour [toward it].”
Ken Griffin, a hedge fund billionaire, took a sledgehammer to the U.S. government over it’s current mounting debt in a letter to his own shareholders just last week. In his own letter, he stated that future generations were going to face dire consequences if our country continues to go down 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.”
In the past, surges in our national debt — which at the moment is somewhere around $34.58 trillion — have been driven by high unemployment rates, a decrease in tax revenue brought in, and increases in government spending on stimulus programs.
“It is irresponsible for the US government to incur a deficit of 6.4% when unemployment is hovering around 3.75%,” he stated, concluding the report.