JPMorgan Chase (JPM) CEO Jamie Dimon once again cited global instability as his chief concern and named it as one of the reasons why inflation may not yet be under control, saying that “geopolitics is getting worse.”
“My caution is all geopolitics, which may determine the state of the economy,” Dimon said in an interview with CNBC TV18 while attending a JPMorgan conference in Mumbai, India.
Geopolitics are “getting worse, they are not getting better,” he added, pointing to recent attacks by Yemen’s Houthi rebels in the Red Sea. “There’s chance for accidents in the energy supply chain. God knows if other countries get involved. You have a lot of war taking place right now.”
The comments marked the third time in the last week that the boss of the biggest US bank offered new skepticism about the economy’s long-term path despite a new rate cut from the Federal Reserve designed to cushion a cooling labor market as inflation falls back.
Flames and smoke rise from the Greek-flagged oil tanker Sounion on the Red Sea in August. Yemen’s Houthis said they attacked the Sounion in the Red Sea. (REUTERS/File Photo) · Reuters / Reuters
On Friday, Dimon poured more cold water on the notion that the US central bank is likely to achieve a soft landing for the economy.
“I wouldn’t count my eggs” on the outcome, he said at the Atlantic Festival in Washington, D.C.
Last Tuesday, when asked at a Georgetown University event what concerned him from a financial markets perspective, he said that “the most important thing that dwarfs all other things, that’s really important, far more important today than [its] been probably since 1945, is this war in Ukraine, what’s going on in Israel [and] in the Middle East, America’s relations with China, and the attack fundamentally on the rule of law that was set up after World War II.”
Dimon has been warning for some time that the US economy could be more vulnerable than some market observers think, having voiced concerns about a potential stagflationary environment where inflation remains elevated and some rates surge to 7% as the labor market weakens.
“I am not sure if the world is prepared for 7%,” he said at an event in India a year ago.
As recently as August, he said he was still “a little bit skeptical” that the inflation rate would fall back to the Fed’s 2% target. He also said then that the odds of a recession still happening were better than the chance of no recession.
Read more: The Fed rate cut: What it means for bank accounts, CDs, loans, and credit cards
Last Tuesday, Dimon acknowledged the need for the Fed to begin lowering interest rates but played down the importance of the central bank’s first move, calling it “a minor thing.”
Story Continues