Dimon referenced the Federal Reserve’s benchmark rate, which has remained unchanged at 5.25%-5.5% since late July. He warned that a jump to a 7% interest rate could potentially trigger stagflation, a situation characterized by slow economic growth and high unemployment coupled with rising prices.
The CEO acknowledged the Federal Reserve’s anti-inflation efforts but expressed apprehensions about reliance on short-term fiscal and monetary stimuli, likening it to a “sugar high”. He underscored the risks posed by geopolitical strife in Ukraine and Europe, as well as energy issues involving oil and gas.
Dimon’s caution comes amidst a period of economic uncertainty, with concerns over the potential for a soft economic landing. The CEO highlighted the need for careful management of these challenges to avoid exacerbating financial stress within the system.
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Source: Economy - investing.com
