“It’s a little sunny right now, things are going well. Everyone thinks the Fed can handle it,” Dimon told a Bernstein conference. “This hurricane is out there, on the road ahead.” “We don’t know if it’s minor or Sandy Superstorm. You better get ready,” Dimon said, adding that JPMorgan Chase (JPM) is preparing for a “non-benign environment” and “bad results.” Dimon said the economy is “distorted” by inflation. He is also concerned that the Fed is beginning to roll out its bond portfolio, a process known as quantitative easing, while raising interest rates. That’s something the market isn’t ready for, Dimon said, adding that people “will write about [this] in the history books for 50 years, “But the Fed is in trouble. Dimon said the central bank needs to raise rates due to rising house prices and other inflationary pressures. emphasize that he still believes that the US banking system is in “great shape” and can withstand these challenges.
Dimon also said that JPMorgan Chase will do its best to attract talent to stay at the forefront of the financial world. The CEO said the bank will be “religious” to pay well to keep its best workers.
Dimon’s most cautious outlook comes just days after he sounded a little more optimistic about what’s next for markets and the economy.
Speaking at a meeting of analysts in late May, Dimon said there were “big storm clouds” on the horizon for the economy, but expressed hope that they could “dissipate.”
“If it were a hurricane, I would tell you,” Dimon told analysts at the meeting, adding that the current conditions are not like the “tsunami” that banks faced in 2007 and 2008 when the mortgage market it was melting down and several large financial institutions collapsed.
Dimon may not be predicting a tsunami yet. But a hurricane is bad enough, and certainly more damaging than a normal storm. Dimon said he was also concerned about the conflict in Ukraine and the impact it would have on oil prices, and predicted on Wednesday that crude oil prices were expected to eventually rise between $ 150 and $ 175 a barrel.
“Wars are going badly. They are heading south. They have unintended consequences,” he said, adding that the conflict will continue to shake commodity markets around the world, affecting oil, gas and wheat prices.