In a recent interview, JPMorgan CEO Jamie Dimon has warned of a potential US economic crisis as the BRICS bloc grows more relevant. Indeed, the notable economist spoke at the Council of Institutional Investors in New York this week. There he laid out a potential outcome for the United States that would be far worse than a recession.
On Wednesday, the Federal Reserve opted to cut interest rates for the first time in four years. The move was made as the country’s inflation issue began retreating towards its 2% target. Yet, the move is not a complete fix for the nation’s fragile economy. Indeed, there is still the potential for this to turn worse as the country desperately tries to avoid a hard landing.
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JPMorgan CEO Warns of a Fate Worse Than Recession for the US Economy
The United States economy has been caught in an increasingly tumultuous position. The Central Bank has sought to fight the continued inflation issue. That led to interest rates reaching a 23-year high. Yet, as Federal Reserve Chair Jerome Powell recently said that the time to cut interest rates is now, some experts are still concerned about the state of the economy.
Among them is JPMorgan CEO Jamie Dimon, who recently warned of a US economic crisis amid geopolitical challengers in the form of the BRICS bloc. Specifically, Dimon recently said he would not rule out stagflation to hit the United States. Moreover, he noted the fate to be far worse than a recession.
“I would say the worst outcome is stagflation—recession, higher inflation,” Dimon said at a recent event in Brooklyn. “And by the way, I wouldn’t take it off the table,” he added. Indeed, for Dimon, there is still much to be concerned about.
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Specifically, there is worry regarding inflationary factors impending for the country. Higher deficits and increased spending could add pressure to an economy mired in fragility. Moreover, the high interest rates will require some time for recovery.
“They’re all inflationary, basically in the short run, the next couple of years,” Dimon noted. “So, it’s hard to look at [it] and say, ‘Well, no, we’re out of the woods.’ I don’t think so,” the JPMorgan executive added.
This is all taking place as the US is seeing its global position challenged. The BRICS bloc has led reinvigorated de-dollarization efforts. With blockchain-based solutions developing, the greenback’s prominence could certainly be threatened. That would ensure the issue is only compounded in the long term.