JPMorgan Chase CEO Jamie Dimon warned on Tuesday not to rely on economic forecasts from central banks such as the Federal Reserve, as in the near past, the Federal Reserve's forecasts were "vastly wrong". He also expressed the need to be prepared for various economic possibilities.
At the "Future Investment Initiative" summit held in Riyadh, Saudi Arabia, Damon stated that the combination of various factors has made predicting the economy increasingly difficult. "We should be prepared for the possibilities and probabilities of various situations, rather than just proposing an action plan
I want to point out that 18 months ago, the central bank was completely wrong, "Damon added. I will be quite cautious about what may happen next year
For most of 2021 and 2022, the Federal Reserve and the Biden administration insisted that price spikes would be "temporary", but this has not proven to be the case. The Federal Reserve did not start raising interest rates until March 2022 to curb the outbreak of inflation, and many economists say the Fed acted too late.
Damon also pointed out that whether the Federal Reserve raises interest rates by another 25 basis points may have "little impact". He said that a large amount of fiscal expenditure and waste will offset the effect of interest rate hikes.
Since the beginning of last year, the Federal Reserve has raised interest rates 11 times. According to CME's FedWatch tool, the market expects a 97% probability of not adjusting interest rates at the November meeting and a 29% probability of raising interest rates by 25 basis points in December.
Fiscal spending is higher than at any time in peacetime, and people have a feeling that central banks and governments can handle all these things well. But I am cautious about what will happen next year, "said Damon.
Last month, Damon issued similar warnings about the resilience of the US economy, particularly regarding rampant government spending and the possibility of a sudden economic slowdown.
He stated at an industry conference that the US government is spending money around the world like a drunken sailor, and if it blindly believes that the US economy will achieve years of growth with the help of consumers, it would be a "big mistake".