The U.S. economy has stayed strong for a while, but things might get worse soon. That’s the warning from JPMorgan Chase CEO Jamie Dimon, who says the good times might not last much longer.
While markets and many experts are hoping for a smooth economic path, Dimon believes we should be prepared for a downturn.
Speaking at a recent Morgan Stanley event, Dimon explained that the help the U.S. economy got during the pandemic, like government spending and easy money policies, is now fading away.
That support kept things stable before, but now, without it, the economy might slow down.
He said we might not get a “soft landing,” which means slowing inflation without losing jobs or going into a recession. Even if we do, he thinks it won’t feel very strong. “Jobs might go down a little. Prices might go up a bit.
Hopefully, only a little.”
Interestingly, Dimon also said that most people, both regular consumers and business owners, don’t usually notice when the economy is about to shift. So even if things seem okay now, that could change quickly.
He also pointed out that lower immigration could hit the labor market and slow down the economy further.
Another thing Dimon is worried about is private credit, which is when companies borrow money from non-bank lenders. If a recession happens, he says this area could face trouble.
That’s why he warned investors not to rush into credit markets right now, saying, “I wouldn’t buy credit at today’s prices.”
The U.S. economy shows mixed signals. While job gains have been surprising in some areas, consumer confidence is showing signs of weakness, and recent inflation data was muted in May. There’s ongoing debate about whether it’s headed for a “soft landing” or a downturn.
Global markets are reacting to U.S. economic uncertainty, particularly regarding trade policies. Concerns over tariffs have led to shifts, with some markets seeing pullbacks, increased volatility, and investors seeking safer assets like gold. The World Bank recently downgraded global growth forecasts.
The crypto market is experiencing heightened volatility influenced by U.S. macro uncertainty, including inflation figures and trade tensions. While some see potential for increased liquidity to benefit crypto, others warn of “risk-off” sentiment pushing prices down. Bitcoin and Ethereum have shown some resilience.
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