NEW YORK (AP) – JPMorgan Chase & Co. CEO Jamie Dimon is hopeful the Federal Reserve will be able to rein in inflation without causing a recession, but there are more He said he would not rule out the possibility of trouble. stagflation.
In an interview with The Associated Press at his newly opened Chase branch in the Bronx, Mr. Dimon said he remains “cautious” about the U.S. economy, adding that inflation could remain strong for an extended period of time and that “there are many things that could happen.” The list includes stagflation.” to the US economy.
“We should be concerned about (the possibility of stagflation),” Dimon said.
Dimon stressed that he remains “hopeful” the U.S. economy will experience a soft landing, one in which inflation remains slightly high, growth slows but a recession is avoided. He stressed that he does not know if that is the most likely outcome.
“I'm a little more skeptical than others that (a soft landing) is warranted,” he said.
The Fed sharply raised interest rates in 2022 and 2023 as inflation reached a 40-year high. Fed officials have said they expect to begin lowering rates at some point, but the date has been delayed because inflation remains well above the central bank's 2% target rate.
Dimon spoke to The Associated Press about a variety of issues, including the economy, the independence of the Federal Reserve, the need to open bank branches and the pressing geopolitical issues of the day.
Inflation has been stubbornly rising so far this year, with Thursday's report showing growth slowed in the first three months of the year, with prices rising even though the economy is weak or in recession. This has sparked concerns about “stagflation'' that could occur if the situation continues. This is a combination of particularly dire economic conditions, with high unemployment rates along with rising costs. A weak economy usually lowers inflation.
The last time stagflation occurred was in the 1970s, when conditions were much worse than they are today. For example, in 1975, the inflation rate exceeded 10%, and the unemployment rate reached 9%. Inflation is currently 3.5% and unemployment is just 3.8%, near half-century lows. Dimon said he believes that even if stagflation does occur, it won't be as bad as it was in the 1970s.
Concerns about stagflation eased on Friday after a government report suggested consumer spending remained strong in March and the economy will continue to expand at a solid pace in coming months.
Dimon said he was “thrilled” that Congress was able to pass a bipartisan national security bill that provides military aid to Ukraine, Taiwan and Israel. In previous comments, Mr. Dimon said it was important to have “American leadership” on the world stage, otherwise the United States would cede its place to China in the next century. . Mr. Dimon had urged the United States to come up with the billions of dollars needed to help Ukraine.
“I think this is a very good sign that they want to make it happen,” Dimon said, referring to House Speaker Mike Johnson and Senate leaders on both sides of the political aisle.
Mr. Dimon also weighed in on the Fed's independence after the Wall Street Journal reported this week that former President Trump's advisers are considering ways to rein in the Fed's independence. emphasized the need to maintain The measures could include requiring the president to remove the Fed chair and to consult with the president on interest rate changes.
“We don't know what these people are thinking or how they're going to deal with it,” Dimon said, adding that any changes would likely require legislation.
Chase opened its 17th “Community Center” branch on Friday. These are large branches designed for low- to moderate-income neighborhoods. These are designed with multipurpose areas to conduct workshops and financial literacy workshops for communities in need.
Mr. Dimon has sought in recent years to emphasize JPMorgan's commitment to low-income communities and minority borrowers. He spends six pages in his latest annual shareholder letter explaining how important it is for JPMorgan to engage in diversity, equity and inclusion efforts, and arguing that the efforts are unnecessary. It was mainly imposed on right-wing politicians and business executives.
“These are good businesses,” Dimon said. They encourage their neighbors to help our country. And we're not shy about it. I don't understand why people say they shouldn't try to lift up their country. ”
Glenniece Arias, 43, lives in the Bronx and works as an Uber driver. She has been banking at Chase for six months, and she said she usually comes to use the ATM to cash checks or check her credit.
She said the branch meets her needs, but she has not heard about expansion or upcoming classes or events. “I didn’t know anything about it, but that’s what I came for,” she said of the program.
In off-the-cuff remarks, Dimon said customers have been steadily coming in.
“I love the fact that so many people walk here. So many people are worried about how they will be treated when they go to a bank branch.”