Jamie Dimon, CEO of JPMorgan Chase, said that the current economic situation in the United States is good, but the possibility of a recession cannot be ruled out. As for the most concerning issue of interest rate cuts in the market, he believes that the Federal Reserve should wait a little longer.
"The world is pricing a soft landing, which could be 70-80%. I think the likelihood of a soft landing for the US economy in the next one or two years is only half of this number. The worst-case scenario will be stagflation," he said.
Dimon also said that the COVID-19 pandemic had distorted economic indicators, and he was "dubious" about these indicators. He said that the Federal Reserve should wait until the situation becomes clearer before lowering interest rates.
"They can always quickly and dramatically lower interest rates. Their credibility is a bit precarious here," he said. "At present, the unemployment rate in the United States is very low, and wages continue to rise."
Federal Reserve Chairman Jerome Powell stated last week that the Federal Reserve is approaching the confidence needed to begin interest rate cuts.
"We are waiting to become more confident, and the inflation rate will continue to remain at 2%. When we gain this confidence - we are not far from this confidence - we should start relaxing restrictions," he said.
Finally, Damon emphasized that although the US economy is currently "somewhat prosperous", the risk of recession still exists.
In fact, due to a series of reasons such as the Federal Reserve's reluctance to cut interest rates, there have been numerous warnings about recession recently. A legendary investor and economic consulting firm that accurately predicted the 2008 financial crisis Gary Shilling& Co President Gary Shilling is one of them.
Looking back at the past seven recessions, Shilling previously stated that they occurred on average 26 months after the Federal Reserve began raising interest rates. He said that it has been about two years since the first interest rate hike in this cycle, indicating that the US economy is about to enter a downturn.
"The likelihood of an economic recession is high," he added, pointing out that there has only been one successful soft landing since World War II.
After the latest data showed an increase in US unemployment, David Rosenberg, the top economist and CEO of Rosenberg Research, became increasingly concerned that a sudden recession could hit the US economy.
His concern stems from the February employment report, which showed an unexpected increase in the unemployment rate from 3.7% to 3.9%.
Rosenberg believes that this data poses a risk to the claim of a soft landing.