“An economic hurricane is on its way to us and investors need to prepare. Today the sun is still shining and conditions are still relatively good in the economy, but that is going to change soon.” This was stated today by Jamie Damon, CEO of JPMorgan Bank, at a conference of investors and analysts in New York, held today (Wednesday). We should prepare. “
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According to Damon, the storm will come mainly because of two main factors: the reduction of the Fed’s balance sheet and the war in Ukraine. “The Fed must reduce its huge balance sheet in order to reduce the huge liquidity in the economy. At the same time, other central banks will probably reduce their balance sheets in the coming years probably. This is an event that has never been before and could cause serious market shocks,” Damon said.
In addition, “the war in Ukraine has caused a jump in commodity prices and will probably continue to have an impact in the coming year. The price of a barrel of oil could reach $ 150-175 soon and of course it will have a negative impact on the economy.”
He added that “Fed captains think they can control the situation and not cause a recession but that is not really true. We at JPMorgan are already taking a very conservative approach and preparing for the storm.”
Damon told the JPMorgan Investors Conference in May that “storm clouds” were towering over the U.S. economy, but has since updated that forecast, given the challenges facing the Federal Reserve in trying to curb inflation. “Okay, everyone thinks the Fed can handle it,” Damon said. Still, Damon also noted there are “bright clouds” in the economy, referring to consumer purchasing power, the rising wage trend and the proliferation of vacancies.
After Damon’s remarks, stock JP Morgan Decreased by about 2, and completed a decrease of about 18% since the beginning of the year.