The CEO of JPMorgan Chase & Co., Jamie Dimon, expressed important concerns about the American economy, declaring that he cannot reject the possibility of stagflation while the nation is struggling with formidable risks resulting from geopolitical instability, persistent budgetary deficits and increasing price pressure.
He also approved the current current approach of patients in the Federal Reserve of Monetary Policy.
“I do not agree that we are in an ideal place,” said Dimon in a Bloomberg television interview carried out at the World Summer in China in Shanghai.
He has developed multifaceted threats, highlighting “huge deficits, inflationary factors and geopolitical risks”.
In this context, Dimon said that the American federal reserve “does the right thing to wait and see before deciding” future interest rates.
His comments arise as Fed officials maintained regular interest rates throughout the year, sailing in a landscape characterized by an economic backdrop resilient juxtaposed to uncertainty about potential changes in government policy – such as prices – and their cascade effects on the economy.
Earlier this month, political decision-makers recognized an increased risk of confronting both high inflation and an increase in unemployment, the characteristics of stagflation.
An important source of this uncertainty is the current commercial dynamic between the United States and China.
While the two economic giants agreed earlier this month for a strong reduction in prices for a period of 90 days to negotiate a new trade agreement, the path to follow is heavy with challenges.
Analysts and investors largely predict that the prices of US President Donald Trump on Chinese products will probably remain at a level sufficient to seriously reduce Chinese exports even after the 90 -day truce.
Dimon expressed the desire for continuous dialogue: “I don’t think the United States government wants to leave China,” he said.
“I hope they have a second round, a third round or a fourth round and I hope it will be in a good place.”
Political uncertainty stifles commercial activity
Copy the link to the section
The often unpredictable pricing announcements of President Trump and the efforts of his administration to reduce or dismantle government agencies have fueled generalized concerns about international trade, inflation, unemployment and recession potential.
Bank leaders noted that this climate of uncertainty encourages companies to suspend expansion plans, including mergers and lucrative acquisitions which are a key activity for Wall Street prosecutors.
Reflecting the severity of these world changes, JPMorgan, the largest American bank, launched its “Center for Geopolitics” this week.
This new unit will provide research on critical geopolitical issues, notably Russia and Ukraine, the Middle East and the trend of world reset.
The unit “is both for us, and it is also to educate customers”, explained Dimon.
Customers ask us all the time, what should we do in this country. How do you look at the risk?
The impact of the uncertainty of policies on customer activity is palpable.
JPMorgan, among other financial institutions, said that customers can adopt a waiting approach, preferring to stay on the sidelines.
Troy Rohrbaugh, C -PDG of the Commercial and Investment Bank of JPMorgan, said earlier this week that the bank’s investment costs could potentially fall from a percentage in the middle of adolescence compared to a year ago – a greater drop than analysts had not planned.
Dollar tax and dynamic challenges
Copy the link to the section
Dimon also underlined the urgent need for the United States to respond to its tax imbalances, declaring that the country must “attack deficit problems”.
He recognized that the justification of investors potentially reduced their assets to US dollars in the midst of these concerns.
“I do not worry about short-term fluctuations in the dollar, but I understand that people could reduce assets in dollars,” he noted.
These concerns are amplified by the current legislative efforts.
On Wednesday evening, the Republican leaders of the Chamber published a revised version of the vast tax and expenses of President Trump.
The new project includes a limit higher than the deduction for state and local taxes (salt) and other modifications, aimed at winning dissident factions within the GOP to obtain support for legislation.
The US Treasury Market has also shown signs of stress.
On Wednesday, treasury bills extended their recent sale, longer -term titles with the weight of the decline.
A 20 -year -old auction received a relatively lukewarm reception of investors.
At one point, the sale pushed the yield on the bond of 30 years up to 13 base points at almost 5.10%, its highest level since 2023.
Treasury yields were little changed to Asian trade on Thursday, indicating provisional stabilization after the recent volatility.
