Jamie Dimon, CEO of JPMorgan Chase, On Friday, he warned of a “troubling” global landscape, highlighting a cascade of pressures, including war, rising geopolitical tensions and inflation, that threaten the economy and could weigh on the performance of the largest bank of the country.
Mr. Dimon’s remarks, made alongside his bank’s quarterly earnings report – which showed weakness in some areas of business – add to his litany of concerns about the then-U.S. economy. The Federal Reserve is considering when and whether to lower interest rates, especially in light of this week’s higher-than-expected inflation data.
“We have never really felt the full effect of quantitative tightening on this scale,” Mr. Dimon said in a statement, referring to the Fed’s efforts to calm the economy.
Mr. Dimon is the most prominent banking executive and his statements are closely followed on Wall Street and in Washington. He was the only executive from a major U.S. lender to attend the White House state dinner this week honoring the Japanese prime minister.
However, its sadness is also at constant odds with the heady financial markets. At the end of 2022, for example, I predicted economic difficulties and, potentially, a severe recession for next year; Instead, the U.S. economy boomed in 2023.
Others were just as confused. Many economists predict that this year would bring what’s called a soft landing, or a slight slowdown in growth and inflation that would allow the Federal Reserve to lower interest rates in an orderly fashion.
Now, with little indication of any slowdown, it is unclear whether the central bank will make the three interest rate cuts that officials had predicted for the year. Mr. Dimon was among the few to say they were preparing for the possibility of another interest rate hike, a move that would suggest more extreme inflation than currently measured.
Mr. Dimon made further remarks about the challenging environment in his annual letter to shareholders this week. He regretted, as before, that the United States had engaged in deficit spending and rattled off a list of complaints about failings by public and private leaders. (“Social media could do more,” he wrote.) Referring to Russia’s invasion of Ukraine and other crises, he wrote that recent events “could very well create risks that could dwarf anything that has happened since World War II.”
JPMorgan’s financial performance has been affected by more mundane problems. Although it earned more than $13 billion in the first quarter, the bank’s average customer deposits fell and it warned of higher spending in the future. JPMorgan also revealed a decline in its net interest income, a closely watched financial metric that essentially measures the amount of money it is able to earn from lending.
Wells Fargo, the nation’s third-largest bank, released separate results Friday that also included a decline in that measure.
JPMorgan shares were down 3% before markets opened Friday.
