According to a US expert, the current risks to the global economy are greater than they have been since the Second World War. What helps is good preparation for all eventualities - and unity.
New York City - Jamie Dimon, the CEO of the US bank JPMorgan Chase, is considered the most influential banker in the USA. The now 68-year-old has been in the financial industry for over 40 years. He was particularly able to demonstrate his leadership qualities during the subprime crisis in the USA: Dimon is the only major bank boss who remained at the helm through the financial crisis of 2008. In his current letter to shareholders, the banker warns of risks “that dwarf everything that has existed since the Second World War.”
Looking into the future: Jamie Dimon predicts risks for the global economy
Under Dimon, JPMorgan Chase became the largest bank in the United States - and one of the largest in the world. The CEO's word carries corresponding weight in the financial industry. In his letter to shareholders, the CEO classifies the impact of current geopolitical crises, such as the war in Ukraine or the war in Gaza, on the global economy. If you opened a newspaper on any day in any year since World War II, you would read a plethora of reports about wars, inflation, recession, terrorism, political polarization, migration and hunger at any given time, says Dimon.
But: “As horrific as these events were, the world in general was on the way to becoming stronger and safer.” In general, people would tend to overestimate the impact of such events on the global economy. Not so current: “However, recent events may well create risks that could eclipse anything since the Second World War - we should not take them lightly.” Almost all nations on earth are currently experiencing uncertainties, manifested in Inflation and volatile markets.
Soft landing for the USA? Dimon doubts that
In view of the global challenges, the CEO called for unity. “In this time of great crisis, it is critically important that we stand together to protect our fundamental freedoms, including the free economy.” The US economy remains “resilient, consumers continue to spend and markets expect currently a soft landing.” However, the economy is being stimulated by high government spending and economic stimulus programs.
In addition, the quantitative tightening is depriving the system of liquidity of $900 billion annually - on an unprecedented scale. Added to this are the crises and their effects on food markets, migration and military relations. Dimon concludes that he remains “cautious”. Investors would be pricing in a 70 to 80 percent chance of a soft landing. “I think the chances are much lower,” Dimon said.
Future Outlook: JPMorgan Chase Gears Up for Interest Rates “Between 2 and 8 Percent or More”
A challenge for the US is transitioning to a greener economy, restructuring global supply chains, increasing military spending and combating rising health care costs. The JPMorgan boss sees inflation as continuing to be at a higher level than investors expect. In his view, the worst scenario is stagflation. JPMorgan Chase is prepared for any eventuality, according to Dimon's letter. For example, on a wide range of interest rates from two to eight percent or even more. “It is important that we are prepared so that we can continue to help our customers, no matter what the future brings,” believes the bank boss.
The leadership role of the USA is threatened externally by other nations, but also internally by polarization, says the CEO. Dimon also explicitly advocated for equality and diversity in his letter to shareholders, contradicting arguments from Republicans who describe this as promoting left-wing ideology and discrimination. In February, U.S. investment firms, including JPMorgan Asset Management, walked out of a low-greenhouse gas investment climate initiative under pressure from Republicans.
Dimon has been at the helm of JPMorgan Chase as CEO since 2006 and, in addition to the bank's performance, regularly comments on political issues, global events and their influence on the economy in his annual letter to shareholders. His assessment of the world situation is usually extensive: the letter this year has a total of almost 30,000 words. JPMorgan Chase was recently criticized, among other things, because of the accusation of having remained inactive in the transactions of the financial fraudster Bernie Madoff and the late sex offender Jeffrey Epstein.