The most influential banker within the country, CEO of JPMorgan Chase Jamie Dimon, told investors on Monday that he continues to expect the U.S. economy to be resilient and grow this 12 months. But he worries about geopolitical events, including the War in Ukraine and that Israel-Hamas warand political polarization within the US could create an environment that “could well create risks that could dwarf anything since World War II.”
The comments got here in an annual letter to shareholders from Dimon, who often uses the letter to weigh in on broad topics reminiscent of politics, regulation and global events and their significance JPMorgan Chasein addition to the general economy.
“America’s global leadership is being challenged externally by other nations and internally by our polarized electorate,” Dimon said. “We must find ways to put aside our differences and work together with other Western nations in the name of democracy. In this time of great crisis, working together to protect our fundamental freedoms, including free enterprise, is paramount.”
Dimon had particular concerns in regards to the continued high levels of deficit spending by the U.S. government and other countries, in addition to the necessity for countries just like the U.S. to remilitarize and further expand their green infrastructure, all of that are more likely to keep inflation higher than investors expect.
Because of those issues, Dimon said he was less optimistic that the U.S. economy would achieve a “soft landing,” which he defined as modest growth together with falling inflation and falling rates of interest in comparison with the broader market. While he says investors are pricing in a “70 to 80 percent” likelihood of a soft landing, Dimon believes the probabilities of such a great consequence are “much lower.”
Even at a time when Some investors and economists ponder whether the Federal Reserve Able to implement his forecast for 3 rate cuts this 12 months, Dimon warned of the potential for rates rising to eight% or more. The Fed’s key rate of interest is currently in a spread of 5.25% to five.50%.
“These significant and somewhat unprecedented forces cause us to remain cautious,” he said.
Like many other CEOs, Dimon said he sees lots of potential in its use cases artificial intelligence. The bank has found 400 use cases for AI up to now, Dimon said, particularly within the bank’s marketing, fraud and risk departments. The bank can also be exploring using AI in software development and general worker productivity plans.
“We firmly believe that the consequences (of AI) will be extraordinary and potentially as transformative as some of the most important technological inventions of the last few centuries: think, among others, of the printing press, the steam engine, electricity, computers and the Internet.” .”
