US futures slide as bank earnings fail to thrill

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  Fri, January 12, 2024 at 6:18 AM MST

  Jamie Dimon once more warns on ‘stickier’ inflation, increased rates of interest

  JPMorgan (JPM) reported fourth quarter outcomes early Friday that capped a file 12 months for the nation’s largest financial institution.

  And contained in the agency’s fourth quarter launch, buyers bought one other expansive view on the US and world economic system from its outspoken CEO, Jamie Dimon.

  Largely reiterating his view that buyers are too complacent with the thought inflation is on a clean path again to the Federal Reserve’s 2% goal and rates of interest will stay increased than forecasters anticipate, Dimon stated a bunch of “unprecedented” elements in markets means the financial institution “have to be ready for any setting.”

  Listed here are Dimon’s comments in full, with our emphasis and spacing added:

  The U.S. economic system continues to be resilient, with customers nonetheless spending, and markets at present anticipate a mushy touchdown. You will need to word that the economic system is being fueled by massive quantities of presidency deficit spending and previous stimulus.

  There may be additionally an ongoing want for elevated spending because of the inexperienced economic system, the restructuring of world provide chains, increased navy spending and rising healthcare prices. This may occasionally lead inflation to be stickier and charges to be increased than markets anticipate. On high of this, there are a selection of draw back dangers to observe.

  Quantitative tightening is draining over $900 billion of liquidity from the system yearly, and we’ve got by no means seen a full cycle of tightening. And the continuing wars in Ukraine and the Center East have the potential to disrupt power and meals markets, migration, and navy and financial relationships, along with their dreadful human value. These important and considerably unprecedented forces trigger us to stay cautious. Whereas we hope for the very best, the previous 12 months demonstrated why we have to be ready for any setting.