Economists Wrong About 2024
Experts surmise the American economy in 2024 could be in for a soft landing after the Fed announced it is planning to cut rates this year.
Source: Mark Wilson/Getty Images
However, the JPMorgan CEO isn’t on board with the idea and claims 2024 may be more like the 1970s, which could have horrible consequences for everyone.
Looming Recession Could Hit in 2024
Dimon spoke about the possibility of a recession during an interview with Maria Bartiromo on the show “Mondays with Maria.”
Source: John Lamparski/Getty Images
During the talk, the head of JPMorgan compared the current state of the American economy to that of the 1980s, which experienced high inflation rates for almost a decade.
Dimon Explains His Prediction
During the talk with Bartiromo, Dimon said he believes the U.S. is close to entering a recession.
Source: Justin Sullivan/Getty Images
“I look at a lot of things and forget just economic models for a second, $2 trillion of fiscal deficit, the infrastructure and IRA act, the green economy, the re-militarization of the world, the restructuring of trade are all inflationary,” he said (via MSN). “And that looks a little more like the 1970s to me.”
People Should Prepare for Uncertain Inflation
The head of one of America’s largest banks also warned people to prepare for uncertainty when it comes to inflation in 2024.
Source: Freepik
“So I think there’s a chance here that people should be prepared that inflation comes down but then bounces around three [percent] and maybe even bounces up a little bit,” he said.
Comments Go Against Expert's Opinions
The points brought up by Dimon on “Mondays with Maria” appear to go against what the nation’s economists believe.
Source: Freepik
Many experts are under the impression that thanks to promised rate cuts from the Fed this year, the economy may experience a soft landing. However, Dimon disagrees.
The Ups and Downs of the Economy
The CEO mentioned he’s skeptical about a scenario in which the economy finds a sweet spot after years of inflation.
Source: Freepik
“I’m a little skeptical of this kind of ‘Goldilocks’ kind of scenario,” he said (via Yahoo Finance).
Crosscurrents Are Getting High
Speaking on the predictions made about potential rate hikes, Dimon said he’s also skeptical about this promise.
Source: Win McNamee/Getty Images
“Obviously, all of us in business have known how to deal with the ups and downs of vicissitudes of the economy. But I do think the crosscurrents are pretty high: the money is running out, rates are high, [quantitative tightening] hasn’t happened yet,” he said.
COVID Money Will Soon Run Out
Dimon made a point to mention that the COVID money, which he believes is keeping the consumers afloat, will soon run out.
Source: Freepik
“Credit is normalizing, but it’s still lower. Stock prices are up. The consumer is in good shape. But the extra money that they got during COVID, trillions of dollars, that’s kind of running out … It runs out this year,” he said.
Recession Is on Its Way
According to the JPMorgan CEO, a recession is on its way. Yet, he admits that it’s difficult to surmise how severe it will be.
Source: Freepik
“It might be [a] mild recession or heavy recession,” said Dimon.
Rate Hikes Take Time to Appear
Dimon explained the rate hikes implemented by the Fed takes longer than expected to show up in the economy. This is one reason why the nation could be heading toward a short recession.
Source: Freepik
“I think they did the right thing to raise rates. I think it was a little late, and I think they’re doing the right thing just to wait and see what happens,” he said (via Yahoo Finance).
The CEO Sticks to His Opinion
Nonetheless, at the end of his talk with Bartiromo, the JPMorgan CEO firmly reiterated the idea that a recession is forthcoming.
Source: Slaven Vlasic/Getty Images
“But all of those factors may very well push us to recession, as opposed to a soft landing,” he said.