In response to a question about some US Federal Reserve officials claiming the US economy was in a sweet spot, Dimon said in an interview with Bloomberg Television on Thursday.
At the Shanghai-based JPMorgan’s Global China Summit, Dimon made his remarks. His remarks come in light of US government policy changes that have caused retailers to declare that they must raise prices and put businesses in a wait-and-see mode due to the country’s growing geopolitical tensions, rising deficits, and consumer price pressure.
According to Al Jazeera, economists like Stuart Mackintosh, the executive director of the financial think tank Group of Thirty, shared Dimon’s concerns.
“We cannot exclude the possibility of stagnation.” We are currently faced with uncertainty regarding tariffs and many other policies that are putting downward pressure on American growth.
The US economy’s credit rating was downgraded by Moody’s Ratings last week. In response to the US’s growing national debt, the company reduced its gold-standard Aaa rating to an Aa1 credit rating.
At the company’s Monday investor day, Dimon’s remarks from Thursday served as further evidence.
According to Dimon, “Credit today is a bad risk.”
Dimon also made comments on US President Donald Trump’s “big beautiful bill,” which includes significant provisions of the Trump administration’s agenda, such as tax cuts, slashes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), increased funding for immigration enforcement, and new taxes on colleges and universities.
They should do the tax bill, in my opinion. In a record obtained by the Reuters news agency, Dimon stated that while it will stabilise things temporarily, it will likely increase the deficit.
According to the non-partisan Congressional Budget Office, the tax bill would increase the nation’s debt by $3.8 trillion.
“Inflation rising,”
Dimon continued, “The US Federal Reserve is doing the right thing to wait and see” before making monetary policy decisions, according to Dimon in the Bloomberg interview. At its most recent policy meeting, the central bank chose to hold rates steady, which was in line with economists’ expectations.
Policymakers at the time weighed a stable labor market even as they acknowledged that it might be in the short run.
This is unsustainable, they say. “We could very well be in a much worse economic situation right away,” Mackintosh said.
As the US Department of Labor and the payroll and human resources firm ADP prepare to release their monthly report on the rate of job growth, more details on the state of the US labor market are anticipated in the coming weeks.
Dimon has long warned against rising inflation and stagflation.
He noted that “I believe there is a little more chance of inflation going up and stagflation” than most people would anticipate.
Source: Aljazeera
Leave a Reply