JP Morgan Chase CEO Jamie Dimon blasts central banks for being ‘100% dead wrong’ about economic forecasts
JP Morgan Chase CEO Jamie Dimon issued a word of caution
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JPMorgan Chase chairman and CEO Jamie Dimon has issued a warning about the dangers of relying on one outlook about the economy.
He suggested being “quite cautious” about what could happen next year, as he pointed out the recent poor track record of forecasts by central banks such as the Federal Reserve.
In the latest of several warnings about the future from the head of the largest UK bank by assets, Mr Dimon said many factors playing out now could make things even more challenging.
Speaking during a panel discussion at the Future Investment Initiative summit in Riyadh, Saudi Arabia, he said: “Prepare for possibilities and probabilities, not calling one course of action, since I’ve never seen anyone call it,” CNBC reports.
JP Morgan Chase CEO Jamie Dimon said to 'prepare for possibilities and probabilities, not calling one course of action'
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He added: “I want to point out the central banks 18 months ago were 100 per cent dead wrong.
“I would be quite cautious about what might happen next year.”
Mr Dimon's comments refer to the Fed’s outlook in early 2022 and for much of the previous year when the central bank’s officials said the inflation surge would be “transitory”.
According to projections released in March 2022, Fed officials saw their key interest rate rising to just 2.8 per cent by the end of this year.
It has been raised 11 times since March 2022, taking it to a targeted range of 5.25 per cent – 5.5 per cent, the highest level in 22 years.
They also forecast core inflation to be at just 2.8 per cent by the end of 2023, which is 1.1 percentage points below its current level, as measured by the core personal consumption expenditures price index (PCE).
Mr Dimon also said he found fault with “this omnipotent feeling that central banks and governments can manage through all this stuff. I’m cautious”.
While much of Wall Street has been speculating whether the Fed might hike interest rates by another quarter percentage point before the end of 2023, Mr Dimon did not show concern.
He said: “I don’t think it makes a piece of difference whether the rates go up 25 basis points or more, like zero, none, nada.”
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The Bank of England held the base rate for the first time after 14 consecutive hikes in September
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The Fed kept the target range for the federal funds rate at a 22-year high of 5.25 per cent to 5.5 per cent in its September 2023 meeting.
In the UK, the Bank of England voted to maintain the base rate for the first time in September, keeping it at 5.25 per cent following 14 consecutive hikes.
It came a day after official statistics showed Consumer Price Index (CPI) inflation had unexpectedly fallen slightly in the year to August 2023, rising by 6.7 per cent - down from 6.8 per cent in July.
In the year to September 2023, UK inflation increased at 6.7 per cent.
The next Bank of England base rate decision is due on November 2.