JPMorgan's Jamie Dimon Warns of Stagflation as U.S. Inflation Dynamics Shift
1min read JPMorgan CEO Jamie Dimon expressed concerns on Tuesday about the potential for stagflation in the U.S. economy, even as recent confidence has grown that inflation is retreating from its peak levels.
Speaking at the Council of Institutional Investors’ fall meeting in Brooklyn, New York, Dimon noted, "I would say the worst outcome is stagflation—recession combined with high inflation. By the way, I wouldn’t rule out the possibility of that happening."
His comments come at a time when U.S. investors are focusing on signs of slowing economic growth. Recent indicators suggest that price pressures in the U.S. are moving towards the Federal Reserve's 2% inflation target, although employment and manufacturing reports have shown some weakness.
This week, investors are anticipating key economic data, including Wednesday's Consumer Price Index (CPI) and Thursday’s Producer Price Index (PPI), which will provide further insights into inflation trends.
Dimon remains concerned about upcoming inflationary forces such as higher deficits and increased infrastructure spending. These factors, combined with the already high-interest-rate environment, could continue to exert inflationary pressure on the struggling U.S. economy.
“They are all inflationary, essentially in the short run, meaning the next few years. So, it’s hard to look at it and say, ‘Well, we are out of the woods.’ I don’t think we are,” Dimon remarked.
Previously, Dimon has cautioned that the U.S. economy is set to slow down. In August, he estimated that the chances of a “soft landing” for the U.S. economy were about 35% to 40%, indicating his belief that a recession was more likely.