JPMorgan CEO warns again: Inflation is more serious than imagined!
In an interview, Jamie Dimon, CEO of JPMorgan Chase, said that the market underestimated how long inflation might last because a series of factors will keep prices rising.
"I think potential inflation may not go away as people expect," he said at the JPMorgan Global Markets Conference. He added: "I think there are a lot of inflationary factors in front of us that may keep inflation slightly higher than people expect."
Looking ahead, Dimon cited worrisome reasons for accelerating price increases, such as green energy transition, infrastructure construction and geopolitical militarization.
Possible upcoming policy changes in the United States also play a role in this regard, and increasing trade restrictions or continued fiscal overspending may drive prices higher.
Despite the general optimism in the market, Dimon has been reiterating this point. Investors are trading ahead, betting that a potential retreat in inflation will eventually allow the Fed to cut interest rates.
For Dimon, the speeches of officials are "a lot of happy talk," he said. In his view, the probability of monetary policy remaining unchanged or tightening is higher than most people expect. In addition, he added that the probability of a soft landing should be half of what the market expects now.
But in Bank of America's latest Global Fund Manager Survey, positive sentiment did radiate. In fact, Tuesday's report marked the most bullish sentiment among investors since the end of 2022, driven by growing confidence in rate cuts this year.
Dimon has been vocal against overly optimistic markets. In his annual letter to JPMorgan shareholders, published last month, he struck a similarly downbeat note about inflation, interest rates and the economy. Geopolitical tensions also worry the bank's head, he said at the time.
More recently, he has struck a calmer tone when it comes to so-called global rivals. Dimon believes the U.S. should not shy away from ties with China. "It's the right thing to do to stay engaged," he said. "China is not America's natural enemy. They have a lot of problems of their own to solve. So, to me, we can work together as best we can."
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