Inflation is eroding Americans’ purchasing power and could push the U.S. economy into recession next year. Managing Director JPMorgan Chase, Jamie Dimon, speaks on CNBC.
With consumers now in better shape than they were during the 2008 global financial crisis, the tide will soon turn due to runaway inflation and higher-than-expected interest rates.
“Consumers have $1.5 trillion in additional savings from the Covid pandemic stimulus programs and spend 10% more than in 2021. But inflation – he added – is eroding all of this liquidity, which will expire in the middle of next year. All of this will disrupt the economy and cause a recession.
This isn’t the first time Dimon has raised concerns about the U.S. economy: In June, JP Morgan’s number one spoke of an economic “hurricane” coming from unknown companies.. The same point was reiterated in October, again during an interview with CNBC, when he said L‘Recession warning for both US and Europe.
Speaking of inflation, Dimon explained that interest rates of 5% “may not be enough” to reduce inflation.
Goldman Sachs: “America Towards Soft Landing”
But Jp Morgan’s Jamie Dimon isn’t the only one who sees no gray in the US economy. Similar concerns have been raised CEO of Goldman Sachs (GS), David Solomon Although it considers a “soft landing” more likely, the US has not ruled out entering a recession.
He explained this during the Wall Street Journal Council Summit:
“I would call the soft landing a spectacle Inflation is close to 4% It is a 1% growth. I think there’s a fair chance we’ll go into that situation, otherwise I’d rule out some kind of recession,” Solomon concluded.