by David Hollerith
Yahoo! Finance, Canada
JPMorgan Chase (JPM) CEO Jamie Dimon said in a new shareholder letter Monday that he is worried about a number of risks to a resilient US economy that could “lead to stickier inflation and higher rates than markets expect.”
He cited large amounts of government spending and efforts by the Federal Reserve to shrink its balance sheet as well as the ongoing wars in the Middle East and Ukraine and their potential to disrupt essential commodities markets, migration, and geopolitical relationships.
“These significant and somewhat unprecedented forces cause us to remain cautious,” he added, noting that the bank is prepared for interest rates “from 2% to 8% or even more.”
During an interview with CNBC released on Monday, Treasury Secretary Janet Yellen responded to a question on whether she is confident that inflation will hit the target rate of 2% by stating that she expects that inflation “will continue to come down over time.” And “we can certainly get into the twos.” Yellen also stated that “we’ve had generally good news on inflation.”
With consumer prices picking up in January and February, the jobs market still strong and the economy in rude health, traders have regularly tweaked their forecasts for monetary policy easing this year, and some are even contemplating no cuts before 2025.
The New York Times has published a strange article by Justin Wolfers, an economist at the University of Michigan. The headline is that his economist brain makes him say with regard to inflation: “Don’t worry, be happy.” The article gives the reader as much reason to trust economists as you do epidemiologists, which is to say none at all.
“Rates have been extremely low for a long time — it’s hard to know how many investors and companies are truly prepared for a higher rate environment.”
Jamie Dimon, the CEO of JP Morgan Chase, did not open his annual shareholder letter with rosy language about the state of the world, or even enthusiasm about his bank’s record profits.
Bitcoin has defied its fiercest critics with a barnstorming price rally over the last few months (and could now be in for its biggest month ever).
(Bloomberg) — US consumer-price data in the coming week, arriving on the heels of surprisingly strong jobs numbers, is projected to show a glacial slowdown in underlying inflation that explains the Federal Reserve’s cautious approach to lowering interest rates.