The struggle in Ukraine and US-China relations are two of JPMorgan Chase CEO Jamie Dimon’s largest financial issues, he mentioned Monday.
“The factor I fear probably the most about is Ukraine,” he informed Bloomberg Tv in an interview Monday morning. “It’s oil, fuel, the management of the world, and our relationship with China — that’s far more severe than the financial vibrations that all of us need to cope with on a day-to-day foundation.”
Russia’s invasion of Ukraine started greater than a 12 months in the past and has roiled the worldwide economic system, resulting in vitality and meals worth shocks, together with world provide chain disruptions that fueled surging inflation internationally and led to painful rate of interest hikes from the world’s central banks.
“That is probably the most severe geopolitical factor we’ve needed to cope with since World Battle II,” Dimon mentioned Monday, additionally highlighting the struggle’s impression on relations with China.
Beijing enjoys an in depth relationship with Moscow, and the Chinese language authorities has been buying Russian vitality and supplying equipment, electronics, base metals, autos, ships and plane, throwing the Kremlin an financial lifeline.
In latest months, tensions between america and China have elevated because the international locations compete for dominance of the microchip business and argue over tariffs, US assist for Taiwan and potential spy balloons.
Dimon mentioned JPMorgan Chase is taking an lively position in bettering the connection between america and China by advising and interesting with each governments on maintaining cordial relations. He’s hoping that “cooler heads prevail” however he doesn’t imagine a enterprise answer exists to ease rising disputes. Whereas JPMorgan Chase does a justifiable share of enterprise with Beijing, it’s the federal government, not personal enterprise, that has to clean tensions, he mentioned.
“We most likely ought to have began resetting this 10 years in the past,” he mentioned. The US authorities has to take a seat down and have a “very severe dialog with the Chinese language authorities,” he mentioned.
Dimon added that he believes the struggle in Ukraine may proceed for years to return.
On the house entrance, Dimon continues to be holding out hope for the likelihood that the Federal Reserve can execute a tender touchdown — decreasing rates of interest whereas avoiding recession. However total, his outlook stays cloudy.
“A light recession is feasible, a tougher recession is feasible,” he mentioned Monday. “I feel there’s a very good probability that inflation will come down, however not sufficient by the fourth quarter — the Fed may very well need to do extra,” he mentioned.
Dimon did word that the US shopper continues to be very wholesome: House costs and wages are excessive, households nonetheless have extra money of their financial institution accounts than they did earlier than the pandemic and so they’re nonetheless spending it.
Customers are in nice form, he mentioned. “However that’s going to finish sooner or later.”
Nonetheless, even when America does enter a recession, he mentioned, shoppers are a lot stronger and can be capable of higher stand up to a downturn than they had been in 2008.