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JPMorgan Chase CEO Jamie Dimon connected Friday warned that respective headwinds, including chronic inflation, Federal Reserve argumentation and ongoing wars, airs awesome threats to nan U.S. economy.
"Many economical indicators proceed to beryllium favorable," nan main executive of America's largest slope said successful a merchandise announcing first-quarter earning results. "However, looking ahead, we stay alert to a number of important uncertain forces."
Those risks see nan "unsettling" world landscape, including "terrible wars and violence" that origin suffering, arsenic good arsenic worsening geopolitical tensions.
Dimon besides sounded nan siren astir a "large number of persistent inflationary pressures" that whitethorn continue. While ostentation has fallen considerably from a highest of 9.1%, advancement has mostly flatlined since nan summer.
WHY ARE GROCERIES STILL SO EXPENSIVE?
JPMorgan Chase CEO Jamie Dimon attends a proceeding connected oversight of Wall Street firms earlier nan Senate Committee connected Banking, Housing, and Urban Affairs successful Washington, D.C., connected Dec. 6, 2023. (Aaron Schwartz/Xinhua via / Getty Images)
The latest consumer value scale data, released Wednesday morning, further fueled concerns connected Wall Street astir nan authorities of inflation.
The study showed that ostentation roseate 3.5% successful March, nan highest level since September 2023, amid a resurgence successful gasoline and rent costs. It marked nan 3rd consecutive period that ostentation came successful hotter than expected, underscoring nan trouble of taming value growth.
| JPM | JPMORGAN CHASE & CO. | 186.15 | -9.09 | -4.66% |
Other parts of nan study besides pointed to stubborn value pressures wrong nan economy. Core prices, which exclude nan much volatile measurements of nutrient and energy, climbed 0.4%, arsenic they did successful January and February, for an yearly summation of 3.8%. Those figures are besides higher than estimates.
US ECONOMY ADDS 303K JOBS IN MARCH, MUCH STRONGER THAN EXPECTED
Pedestrians adjacent nan U.S. Treasury building successful Washington, D.C., connected Dec. 30, 2022. (Ting Shen/Bloomberg via / Getty Images)
Finally, Dimon expressed concerns complete nan Federal Reserve's run to shrink nan assets it is holding connected its $7.5 trillion equilibrium sheet, nan semipermanent effects of which he said are still unclear.
"We person ne'er genuinely knowledgeable nan afloat effect of quantitative tightening connected this scale," he said.
Dimon's comments travel arsenic Federal Reserve policymakers measurement erstwhile to commencement cutting liking rates amid concerns that advancement connected ostentation has stalled. Investors person steadily dialed backmost their expectations arsenic cardinal slope officials awesome they are successful nary unreserved to cut, and that incoming economical information will guideline their decision.
Hiking liking rates creates higher rates connected user and business loans, which past slows nan system by forcing employers to trim backmost connected spending. Higher rates person helped push nan mean complaint connected a 30-year owe supra 8% for nan first clip successful decades. Borrowing costs for everything from location equity lines of credit, car loans and in installments cards person besides spiked.
| I:DJI | DOW JONES AVERAGES | 38220.14 | -238.94 | -0.62% |
| I:COMP | NASDAQ COMPOSITE INDEX | 16303.353191 | -138.84 | -0.84% |
| SP500 | S&P 500 | 5162.1 | -36.96 | -0.71% |
Yet nan accelerated emergence successful rates has not stopped consumers from spending aliases businesses from hiring, buoying hopes connected Wall Street that nan U.S. system tin avert a recession. Additionally, nan S&P 500, nan broadest measurement of nan U.S. banal market, is hovering astatine an all-time high.
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Dimon, however, sounded a much skeptical statement astir nan likelihood of a soft landing earlier this week.
"These markets look to beryllium pricing successful astatine a 70% to 80% chance of a soft landing – humble maturation on pinch declining ostentation and liking rates," he wrote Monday successful his annual missive to shareholders. "I judge nan likelihood are a batch little than that."
