The Chairman and CEO of JPMorgan Chase & Co described the challenges facing the US economy as a “hurricane” on the way and urged the Federal Reserve to take strong action to prevent the world’s largest economy from slipping into recession.
Dimon’s comments come a day after Chairman Joe Biden met with Fed Chairman Jerome Powell to discuss inflation, which is hovering around 40-year highs.
“It’s a hurricane,” Dimon told a banking conference, adding that the current situation is unprecedented. “Right now it’s a bit sunny, things are going well. Everybody thinks the Fed can handle this. That hurricane is out there, on the highway, coming our way.. We just don’t know if he’s a minor one or Superstorm Sandy,” she added.
Mohamed El-Erian
The chairman of Gramercy Fund Management and chief economic adviser to Allianz, he has been a well-known critic of the Federal Reserve. Stagflation is the “worst” thing for the Federal Reserve, El-Erian told Bloomberg, because it conflicts with the two goals of the central bank’s famous dual mandate: maintaining price stability and maximum employment.
As a result, the Fed “is going to have to make a very difficult decision.” The central bank can continue to raise rates to fight inflation at the risk of tipping the economy into recession, or ignore rising consumer prices and hope that slower growth will bring inflation back to target levels.
However, El-Erian broke with constant Wall Street predictions of an impending recession, telling Bloomberg that a full-blown recession for the US economy is not guaranteed. But stagflation, he said, is now “inevitable,” and stock market investors have yet to assess the “significant slowdown in growth” ahead. “We’ve seen growth fall and we’re seeing inflation stay high,” El-Erian said.
michael wilson
Morgan Stanley’s chief US equity strategist Michael Wilson warned of a slowing economy and recommended taking defensive positions by buying bonds rather than stocks.
“The recent rally in the stock markets will be short-lived,” said one of the most listened to personalities on Wall Street. “That leaves us more constructive on bonds than short-term equities as growth concerns take center stage, hence doubling down on our defensive bias,” Wilson said. Wilson’s thesis is that the economy is headed toward a sharp slowdowndue to a “recovery in demand from last year’s fiscal stimulus, demand destruction from high prices, food and energy price spikes from the war serving as a tax, and the accumulation of inventories that have now caught up with demand.”
michael bury
“As I said in relation to 2008: it’s like watching a plane crash. It hurts, it’s not fun and I’m not smiling,” the investor responsible for Scion Asset Management published on his personal Twitter account three the seventh consecutive week in which the S&P fell. 500. Then he deleted the message.
David Rosenberg
“Get ready for a recession in the summer,” the chief economist and strategist at Rosenberg Research & Associates had warned last April. And he even went further and predicted a more prolonged crisis: “It took two painful recessions, in 1981 and 1982, for then Fed Chairman Paul Volcker, the patron saint of inflation fighters and role model of Jerome Powell, buried a decade’s worth of inflation and revived the US economy and stock market.
Like his colleagues, he compared the recent crisis to that of 2008 and said: “The last two years represented a false bull market built on sand, not concrete.”
Source: Ambito
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