Jamie Dimon: 'The U.S. economy today is a classic tale of two cities'
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warning on the state
Jamie Dimon: 'The U.S. economy today is a classic tale of two cities'
As megabank CEOs attended their annual congressional hearings for day one of two on Wednesday, remarks on the U.S. economy permeated usual discussions around regulatory issues such as compliance and consumer protection this year.
JPMorgan Chief Jamie Dimon said he hoped a soft landing was still a possibility for the Federal Reserve but warned policymakers "should be prepared for the worst."
The live comments build on pre-written testimony from Dimon, in which he touched on the uncertainty posed by conflicting macroeconomic trends — specifically, strong consumer spending and a robust labor market against the backdrop of historic inflation and unprecedented monetary tightening by the Federal Reserve.
“The U.S. economy today is a classic tale of two cities,” the leader of the country’s largest bank stated. “There are headwinds and tailwinds, making it challenging to predict the future.”
Dimon cited strong consumer balance sheets, “plentiful job openings” that continue to surprise to the upside, and healthy businesses while also highlighting crushing inflation that has eroded worker incomes, supply chain imbalances, the ongoing war in Ukraine, and restrictive Federal Reserve policy.
The comments came as Federal Reserve officials delivered a third-straight 75-basis-point interest rate hike in efforts to restore price stability and signaled more aggressive increases strategists have warned may tip the economy into a recession.
“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe,” Dimon stated.
Citi Chief Executive Jane Fraser warned of "tough times ahead" for U.S. consumers, echoing Dimon's sentiments about the economic picture,
Ahead of the hearing, Fraser also wrote in published testimony: "The worst of Covid may be behind us, but the economic challenges we face are no less daunting."
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