June 24, 2022

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Five key takeaways from Jamie Dimon’s letter to JPMorgan’s investors

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Letter covers critical issues including the war in Ukraine, the energy crisis, sanctions, inflation and interest rates

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WASHINGTON — Jamie Dimon, CEO of JPMorgan Chase & Co, published his closely watched annual letter to shareholders on Monday, covering critical issues including the war in Ukraine, the energy crisis, sanctions, inflation and interest rates.

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Here are five of the key takeaways from the letter:

THE U.S. ECONOMY IS STILL STRONG…

Dimon has long been bullish on the U.S. economy and repeated that message in his letter, noting the average American consumer is “in excellent financial shape” with leverage among the lowest on record, excellent mortgage underwriting, plentiful jobs with wage increases and more than US$2 trillion in excess savings.

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…BUT INFLATION WILL REQUIRE AGGRESSIVE RATE HIKES

The Federal Reserve and the government were right to take bold actions amid the pandemic, but stimulus probably lasted too long, said Dimon. He believes the rate rises needed to rein in inflation would be “significantly higher than the markets expect.”

Dimon also had some advice for the Fed: it shouldn’t worry about the market volatility rate rises will cause unless that volatility affects the economy. It should be flexible in its plan and be prepared to respond quickly to events on the ground.

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THE WAR IN UKRAINE WILL SLOW THE GLOBAL ECONOMY

“The hostilities in Ukraine and the sanctions on Russia are already having a substantial economic impact,” Dimon…

Reuters

2022-04-04 11:43:30

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