Jamie Dimon is optimistic about the US economy – at least for the next few years.
Dimon, the long-standing CEO and Chairman of JPMorgan Chase, sees strong growth ahead for the world’s largest economy, thanks to the U.S. government’s response to the coronavirus pandemic that has flooded many consumers with savings, according to his annual shareholder letter.
“I have no doubt that with excess savings, new stimulus measures, massive deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy is likely to boom,” said Dimon. in the letter. “This boom could easily continue into 2023, as all spending could continue well into 2023.”
Dimon, who managed JPMorgan during the 2008 financial crisis and helped create the largest US bank by assets, pointed out that the magnitude of government spending during the pandemic far exceeds the response to that previous crisis. The longer-term impact of the reopening boom won’t be known until years into the future, he said, as it will take time to assess the quality of government spending, including President Joe Biden’s proposed $ 2 trillion infrastructure bill.
“Spent wisely, it will create more economic opportunities for everyone,” he said.
Dimon, 65, weighed in on a range of topics familiar to viewers of the country’s most prominent banker: he promoted JPMorgan’s efforts to create economic opportunities for backward Americans, and highlighted threats to fintech’s dominance of US banks and Big Tech players, and held their views on government policies and the role of companies to help bring about change.
Although Dimon called stock market valuations “quite high,” he said a multi-year boom may justify current levels as markets price economic growth and excess savings making its way into equities. He said there was “some scum and speculation” in parts of the market, but didn’t say where exactly.
“Conversely, in this boom scenario, it is difficult to justify the price of US debt (most people consider the 10-year bond as the main reference point for US debt),” said Dimon. “This is due to two factors: first, the huge supply of debt to be absorbed; and second, the not unreasonable possibility that an increase in inflation will not be merely temporary.”
While he is optimistic about the economy’s near future, the US faces serious challenges, Dimon said. The country has been put to the test before – although the conflicts started with the Civil War, the Great Depression and the civil unrest in the 1960s and 1970s, he said.
“In all cases, America’s power and resilience strengthened our position in the world, especially in relation to our main international competitors,” said Dimon. “This time may be different.”
The past year has revealed challenges for U.S. institutions, elected officials and families as our country’s rivals see a nation torn and paralyzed by politics, as well as racial and income inequality – and a country incapable of managing government policies. coordinate (fiscal, monetary, industrial). , regulatory) in a coherent way to achieve national goals. “
Ultimately, the country must “transcend our differences and our self-interest and act for the greater good,” Dimon said. “The good news is that this can be remedied.”
This story evolves. Please check again for updates.