Top Banker: Inflation Crisis Not Over

( – Shooting down Joe Biden’s claims that he got the economy under control, JPMorgan Chase CEO Jamie Dimon recently shared his somber perspectives on the economic horizon for the United States.

In his yearly letter to stakeholders, he highlighted several geopolitical and economic issues creating uncertainty: conflicts in Europe and the Middle East and escalating frictions with China, which have, in turn, worsened problems like soaring energy and food costs, inflation and market unpredictability.

Critics have linked these international policy crises to Biden’s weakness and lack of leadership skill on the global stage, which suggests that America’s rivals feel emboldened to act under his administration.

Dimon also highlighted the role of major governmental deficit spending and previous stimulus measures to prop the economy up.

He flagged the need for bigger spending across several areas: transitioning to eco-friendly energy, revamping global supply chains, boosting military spending and managing rising healthcare costs.

He argued these factors could “lead to stickier inflation and higher rates than markets expect. Furthermore, there are downside risks to watch.”

He expressed concern over the short-term focus dominating economic discourse instead of taking up a more long-term perspective.

“For example, today there is tremendous interest in monthly inflation data, although it seems to me that every long-term trend I see increases inflation relative to the last 20 years,” he observed.

He added that factors like the trillions in fiscal spending, investments for the green economy, global remilitarization, and shifts in global trade are clear inflationary forces that conventional models might fail to capture fully.

Although there is market optimism for a “soft landing” of the U.S. economy, Dimon questioned how real the claims of steady growth and declining inflation and interest rates were.

He also slammed the excessive focus on short-term inflation data and minor interest rate adjustments.

Dimon cautioned against feeling content and warned that inflation could surge once again, possibly exceeding 8%, and about a range of economic scenarios from robust growth with moderate inflation to stagflation—a combination of recession and inflation.

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