China's Economy Echoing 2008 Financial Crisis

9.13.23 - China's Economy Echoing 2008 Financial Crisis

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Jamie Dimon warns of risks to US economy: 'We've been spending like drunken sailors' -Fox Business

While many in the media like to rejoice in our 'soft landing', financial experts are saying, "not so fast"; Jamie Dimon is one of them. As any good economist realizes, we don't see the results of fiscal policy shifts right away. Dimon sees the chickens coming home to roost over the next year.

by Megan Henney

JPMorgan Chase CEO Jamie Dimon sounded the alarm over the state of the economy on Monday, warning that the "booming environment" cannot last forever.

Speaking at the Barclays Global Financial Services Conference in New York, Dimon warned of significant headwinds to the economy, including geopolitical tensions, government spending and monetary policy tightening by central banks across the world.

"We've been spending money like drunken sailors around the world, this war in Ukraine is still going on. Those are really big 'buts,'" he said. "To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake."

The steady decline in inflation and the surprisingly resilient labor market have raised the specter among many economists of a "soft landing." But Dimon - who last year warned of an "economic hurricane" - remains skeptical that the good times will keep coming.

He cited concerns over the Federal Reserve's quantitative tightening campaign, and an increasing reliance on fiscal deficits, as well as the downstream impact of the Inflation Reduction Act, global remilitarization and greenification of the economy.

Tighter monetary policy works on a lag, meaning that it's often unclear when higher interest rates actually begin to affect the economy. Dimon seemed to allude to that during the question-and-answer session, noting that business results could change drastically in a year.