JPMorgan CEO Jamie Dimon said the company is preparing for extremely dire economic situations.
He said there’s “a hurricane” coming — an upgrade from his previous assessment that it was a “storm.”
“You’d better brace yourself,” Dimon told the roomful of analysts and investors, according to a Wednesday (June 1) CNBC report. “JPMorgan is bracing ourselves, and we’re going to be very conservative with our balance sheet.”
This comes with a number of factors like inflation, supply chain issues and the pandemic’s continuing ravages.
Stocks have been recovering lately due to optimism on possibly easing inflation, but there are still fears that the Federal Reserve might cause a recession as they end their “cheap money era” and try to fight price increases.
In Dimon’s estimation, there are a few different factors at play — the Fed this month will reverse its emergency bond-buying program and shrink its balance sheet, which could ramp up $95 billion a month in reduced bond holdings. He said they had “never seen anything” like it and that it could be “something you could be writing history books on.”
The other factor is the war in Ukraine, which has had impacts on commodities including food and fuel.
Dimon said oil “almost has to go up” in price due to the war, and could hit “$150 or $175 a barrel.”
People have been seeing evidence of the economic troubles for months now, and the mass price increases have seen them pulling back on big-ticket items, PYMNTS wrote.
Read more: US Consumers Pull Back on Major Purchases
U.S. consumer confidence levels, as measured by research organization The Conference Board, has begun to slip in connection with that.
Lynn Franco, senior director of economic indicators at the firm, said the decline was driven by “a perceived softening in labor market conditions.”
She added that the public views of current business conditions, which are usually ahead of job trends, have improved.
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