Jamie Dimon warned two years ago that storm clouds and a hurricane were brewing in the US economy. The JPMorgan Chase CEO, one of the most closely followed figures across the globe for his views on the economy, among other topics, was off by miles.
The US economy not only skirted a recession — something many prominent economists also predicted at the time — but has been growing at an even faster pace than a year ago. On top of that, the unemployment rate has stayed below 4% for more than two years despite 11 rate hikes intended to slow the economy in an effort to curb decades-high inflation.
Dimon’s prior miscalculation isn’t stopping him from sounding the alarm again. In the bank’s annual shareholder letter released Monday, ahead of its Friday quarterly earnings report, Dimon said he has “concerns about persistent inflationary pressures.” That’s why he’s skeptical the economy will achieve a soft landing, where inflation continues to cool without causing an unemployment spike.
Federal Reserve officials share Dimon’s concerns, leading some to question whether any rate cuts should happen this year, starkly contrasting the median forecast of three cuts they made at last month’s meeting and first signaled back in December. But potentially persistent inflation isn’t the only red flag in the economy right now.
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