Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war

Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war


Jamie Dimon, CEO of JP Morgan Chase, appears on CNBC’s Squawk Box at the 2020 World Economic Forum in Davos, Switzerland on Jan. 22nd, 2020.

Adam Galica | CNBC

JPMorgan Chase CEO Jamie Dimon says he is preparing the biggest U.S. bank for an economic hurricane on the horizon and advised investors to do the same.

“You know, I said there’s storm clouds but I’m going to change it… it’s a hurricane,” Dimon said Wednesday at a financial conference in New York. While conditions seem “fine” at the moment, nobody knows if the hurricane is “a minor one or Superstorm Sandy,” he added.

“You better brace yourself,” Dimon told the roomful of analysts and investors. “JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet.”

There are two main factors that has Dimon worried: First, the Federal Reserve has signalled it will reverse its emergency bond buying programs and shrink its balance sheet. The so-called quantitative tightening, or QT, is scheduled to begin this month and will ramp up to $95 billion a month in reduced bond holdings.

“We’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years,” Dimon said, adding that “a lot” about quantitative easing programs “backfired.”

Central banks “don’t have a choice because there’s too much liquidity in the system,” Dimon said. “They have to remove some of the liquidity to stop the speculation, reduce home prices and stuff like that.”

The other large factor worrying Dimon is the Ukraine war and its impact on commodities, including food and fuel. Oil “almost has to go up in price” because of disruptions caused by the worst European conflict since World War II, potentially hitting $150 or $175 a barrel, Dimon said.

“Wars go bad, [they] go South in unintended consequences,” Dimon said. “We’re not taking the proper actions to protect Europe from what’s going to happen to oil in the short run.”

This story is developing. Please check back for updates.



Source

Stocks making the biggest moves midday: Reddit, Super Micro Computer, Intuit and more
Finance

Stocks making the biggest moves midday: Reddit, Super Micro Computer, Intuit and more

Check out the companies making headlines in midday trading. Elastic – Shares surged about 15% after the software company topped Wall Street’s expectations for its fiscal second-quarter results. Elastic posted adjusted earnings of 59 cents per share on revenue of $365 million. Meanwhile, analysts surveyed by LSEG expected it to earn 38 cents per share […]

Read More
‘I have no money’: Thousands of Americans see their savings vanish in Synapse fintech crisis
Finance

‘I have no money’: Thousands of Americans see their savings vanish in Synapse fintech crisis

Key Points Thousands of Americans will receive little or nothing from savings accounts that were locked during the collapse of fintech middleman Synapse. Customers believed the accounts were backed by the full faith and credit of the U.S. government. CNBC spoke to a dozen customers caught in the predicament, people who have lost sums ranging […]

Read More
Stocks making the biggest moves premarket: Gap, NetApp, Intuit and more
Finance

Stocks making the biggest moves premarket: Gap, NetApp, Intuit and more

Check out the companies making headlines in premarket trading. Intuit — Stock in the financial software firm pulled back about 3% after its earnings guidance for the current quarter missed analyst estimates. Intuit forecast second-quarter earnings of $2.55 to $2.61 per share, while analysts polled by FactSet were looking for a profit of $3.25 per […]

Read More