Jamie Dimon is positive about the US economy – at least for the next few years.
Dimon, the longtime CEO and chairman of JPMorgan Chase, predicts strong growth for the world’s largest economy, thanks to the US government’s response to the coronavirus pandemic that has swept many consumers, according to its annual shareholder letter.
“I have little doubt that the U.S. economy is likely to recover, with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria at the end of the pandemic,” Dimon said in the letter. “This boom could easily amount to 2023, because all the spending could stretch to 2023.”
Dimon, who managed JPMorgan through the 2008 financial crisis, and helped create the largest U.S. bank by assets, pointed out that the extent of government spending during the pandemic far exceeds the response to the previous crisis. The consequences of the long-term reopening will only be known in the future, as it will take time to determine the quality of government spending, including President Joe Biden’s proposed $ 2 billion infrastructure bill.
“Spend wisely, it will create more economic opportunities for all,” he said.
Dimon, 65, touched on a range of topics familiar to viewers of the country’s leading banker: he promoted JPMorgan’s efforts to create economic opportunities for disadvantaged Americans, and posed threats to US banks’ dominance of fintech- and Big Tech players emphasize. , and thought about public policy and the role of corporations in helping to bring about change.
While Dimon called stock market valuations ‘fairly high’, he said a surge in more years could justify current levels as the markets price economic growth and excessive savings indicating equities. He said there was some froth and speculation in parts of the market, but did not say exactly.
“Conversely, it is difficult to justify the price of U.S. debt in this training scenario (most people consider the 10-year mortgage to be the most important reference point for U.S. debt),” Dimon said. “This is due to two factors: firstly, the large debt supply that needs to be absorbed; and secondly, the unreasonable possibility that an increase in inflation will not just be temporary.”
Although he is strong for the immediate future of the economy, there are major challenges ahead for the US, Dimon said. The country has been tested before – although conflicts began with the Civil War, the Great Depression and the social upheaval in the 1960s and 1970s, he said.
“In both cases, the strength and resilience of America has strengthened our position in the world, especially in relation to our major international competitors,” Dimon said. “This time may be different.”
The past year has highlighted challenges for U.S. institutions, elected officials, and families, as our country’s rivals see a nation torn apart and paralyzed by politics, as well as racial and income equality – and a country that does not have government policies (fiscal, monetary, industrial) can not coordinate. , regulatory) in any coherent way to achieve national objectives. “
The country must ultimately “go beyond our differences and self-interest and act for the greater good,” Dimon said. “The good news is, it can be fixed.”
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