NEW YORK (AP) — JPMorgan Chase CEO Jamie Dimon says the Federal Reserve can reduce inflation without triggering a recession, but he can't rule out the possibility of such complications. stagnation.
In an interview with The Associated Press at the opening of a Chase branch in The Bronx, Dimon said he was „cautious” about the U.S. economy, that inflation would be sticky for a long time and that „stagnation is on the list of possibilities.” to the US economy.
„You have to worry about (the possibility of stagnation),” Dimon said.
Dimon insisted the U.S. economy is still „optimistic” of experiencing a soft landing, where growth slows but inflation is slightly higher and the economy avoids recession, but he's not sure that's the most likely outcome.
„I'm a bit more skeptical than others that a (soft landing) is a given,” he said.
The Fed raised interest rates quickly in 2022 and 2023 after inflation hit its highest level in four decades. Fed officials expected to begin cutting rates at some point, but the timeline has been pushed back as inflation remains above the central bank's target rate of 2%.
Dimon spoke to the AP on a variety of issues, including the independence of the Federal Reserve, the health of the American consumer, the need for banks to open branches and the pressing geopolitical issues of the day.
Inflation has remained stubbornly elevated so far this year, and growth slowed in the first three months of the year, a report on Thursday fueled fears of „stagnation” that occurs when an economy is weak or in recession, even as prices continue to rise. This is a particularly bad combination of economic conditions, with high unemployment and rising costs. Generally, a sluggish economy reduces inflation.
The last recession occurred in the 1970s, when conditions were much worse than today. For example, in 1975, inflation was 10% and the unemployment rate was 9%. Inflation is now at 3.5% and unemployment is just 3.8%, the lowest in half a century. Dimon said he believes that if a recession occurs, it won't be as bad as it was in the 1970s.
Fears of a recession eased on Friday after a government report showed consumer spending remained strong in March, suggesting the economy will expand at a solid pace in coming months.
Dimon also emphasized the need for the Federal Reserve to remain independent, following a report by The Wall Street Journal this week that former President Trump's advisers must again choose ways to limit the central bank's independence. These actions include the president removing the chairman of the central bank or consulting the president on any changes in interest rates.
„I don't know what these people are thinking, or how they're going to go about this,” Dimon said, adding that any changes would require legislation.
Chase was opening its 17th „community center” branch on Friday. These are large branches designed for low to moderate income areas. They are designed with multi-purpose areas that conduct workshops and financial literacy work for needy communities.
Glennys Arias, 43, lives in the Bronx and works as an Uber driver. She has been banking with Chase for six months and said she regularly uses the ATM to cash checks and check her credit.
He said the branch has met his needs and he hasn't heard about expansion or upcoming classes or events. „I don't know anything about it, but I'll be there for it,” he said of the programming.
In off-the-cuff comments, Dimon noted the steady flow of customers.
„I love that a lot of people walk in here. Many people are nervous about how they will be treated when they walk into a bank branch.
„Oddany rozwiązywacz problemów. Przyjazny hipsterom praktykant bekonu. Miłośnik kawy. Nieuleczalny introwertyk. Student.