Dimon, who is one of the most respected names on Wall Street, shared his outlook on the US economy in an interview with CNBC this week, saying he thinks the odds of a “soft landing” — an economic slowdown engineered by central banks to avoid a recession — are only around 35% to 40%.
“I’m fairly optimistic that if we have a mild recession, even a harder one, we will be OK,” Dimon told the outlet. “Of course, I’m very sympathetic to people who lose their jobs. You don’t want a hard landing.”
Dimon cited ongoing uncertainty in several sectors that could continue to affect markets, including geopolitics, spending, and elections, all of which are likely to cause “some consternation” in the markets.
Since 2022, Dimon has been warning of economic peril. In July, he told Swiss newspaper NZZ that the Fed was at risk of moving too soon, encouraging the central bank to wait on rate cuts for the time being.
This week, Dimon also told CNBC that he’s skeptical the Fed will reach its goal of achieving maximum employment while returning inflation to a rate of 2% over the long run.
The billionaire said his skepticism is based on future market impacts, including deficit spending, a green economy, and a “remilitarization” of the world.
“They haven’t really happened yet, but they are going to happen, and they’re not deflationary,” Dimon told the outlet of the potential market influences.
JPMorgan economists are predicting a 50-basis-point cut in September and November and 25-basis-point cuts afterward.
But ultimately, Dimon said he doesn’t think the rate effect itself is all that important.
“Every day, 325 million Americans go to work, go to their jobs, take care of their families, take care of their kids, build out their house, change a job,” Dimon said. “And is it going to be affected by the Fed changing rates by 50-basis points?”
“I don’t think so,” he added.
The Fed has kept rates unchanged thus far in 2024, but a particularly disappointing jobs report last week and a shaky stock market have many experts predicting a rate cut as soon as next month.
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