Anytime JPMorgan Chase releases a quarterly earnings report, CEO Jamie Dimon can’t help but sound off on his fears for the U.S. economy or his frustration with the rising national debt, often setting the agenda for the latest hot topic in the world of finance. On Friday, investors got another taste of Dimon’s typical style in JPMorgan’s first quarter earnings release. The CEO warned in a statement that while economic indicators remain “favorable” and both consumers and businesses are in “good shape” for now, he sees “a number of significant uncertain forces” that could spoil the party.
Dimon called the geopolitical outlook “unsettling” amid the Russia-Ukraine and Israel-Hamas conflicts, warned of “persistent” inflationary pressures, and said the full impact of the Fed’s tighter monetary policies have yet to be felt. But the CEO went even further in JPMorgan’s follow-up earnings call with analysts Friday morning.
While most economists have abandoned their recession calls this year in favor of a rosier (but more inflationary) outlook for the U.S., Dimon said he’s far less optimistic and a “moderate recession” remains a possibility. “We’re okay right now. It does not mean we’re okay down the road,” he told analysts. “I’m just on the more cautious side …Everything is okay today, but you’ve got to be prepared for a range of outcomes, which we are.”
A recession would be terrible news for consumers, but Dimon went on to outline what he called the “worst-case” scenario for real estate—and maybe the entire economy—in response to a question from Bank of America Research analyst Ebrahim Poonawala, arguing stagflation could be on the way. It was a response that even recalled the dire period for the real estate industry after the Global Financial Crisis.
Real estate’s stagflation nightmare
Stagflation, the portmanteau of low growth and high inflation
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