The prospect of a recession in the US is not “off the table” but the Federal Reserve should wait before cutting interest rates, according to the head of JP Morgan Chase.
Jamie Dimon, the investment banking company’s CEO, made the comments while appearing at the Australian Financial Review Business Summit in Sydney through video link.R
“The world is pricing in a soft landing, at probably 70 per cent to 80 per cent,” the chief executive explained.
“I think the chance of a soft landing in the next year or two is half that. The worst case would be stagflation.”
According to Dimon, the usual indicators surrounding the economy have been distorted following the pandemic and he takes then with a “grain of salt”.
As well as this, the JP Morgan boss said that the Fed should wait for further clarity before deciding to slash interest rates.
The central bank has raised the Federal Funds Rate to 5.25 per cent and 5.50 per cent which has hiked repayments for borrowers and mortgage holders.
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The CEO of JP Morgan is issuing a recession warning
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Source Agencies
