Jamie Dimon is the most famous banker in the world. His word should mean something because it is impactful. If that’s the case, brace yourself for what is coming economically in the next few months.
According to Dimon, the combo of actions by the Fed, rising inflation, and Putin’s invasion of Ukraine, an economic “hurricane” is on the horizon.
The JP Morgan Chase CEO specifically said this.
“I said there were storm clouds. But I’m going to change it. It’s a hurricane. Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle it. That hurricane is right out there down the road coming our way. We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself.”
What has caused him to sound the alert and essentially tell people to put plywood on their windows and seek higher ground? A Fox Business report said it’s the “Federal Reserve moving to unwind its $8.9 trillion balance sheet, deploying a less-known tool known as quantitative tightening that will further tighten credit for U.S. households as officials try to tame red-hot inflation.”
Here’s more from Dimon.
“We’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years.”
As for Russia’s invasion, Dimon is worried about the effect on the price of commodities, specifically food and oil. He said it could hit $150 or even $175 a barrel. Right now, a barrel is selling for $116.
Inflation climbed 8.3% in April. That’s almost a 40-year high. And Dimon thinks it’s only the beginning.