Jamie Dimon said the Federal Reserve is unlikely to engineer a “soft landing” for the US economy as it raises interest rates to choke off inflation.
Central bank policymakers probably can’t cool the red-hot economy without bringing on a recession, the JPMorgan Chase & Co. chief executive officer said at an industry conference in Washington Thursday.
Still, Dimon said he has “total faith and trust” in Fed Chair Jay Powell, and that stagflation is far worse than most of the other potential outcomes as the Fed works to cool price pressures.
The CEO also said his “gut” tells him that the Fed’s benchmark rate will probably have to rise higher than the 4% to 4.5% level many economists are predicting, as inflation persists. Core inflation, excluding food and energy, jumped to a 40-year high of 6.6% in September from a year earlier, data released Thursday showed.
Dimon said earlier this week that he expects US and global recessions by the middle of next year, citing drivers including rising interest rates, persistent inflation and Russia’s invasion of Ukraine.
The biggest US bank reports third-quarter results on Friday, kicking off an earnings season in which investors will be focused on how consumers and businesses are navigating through the changing economic environment.
This article was provided by Bloomberg News.