Jamie Dimon is optimistic about the US economy – at least for the next several years.
In his annual letter to shareholders, the longtime chairman and CEO of JPMorgan Chase said he sees strong growth for the world’s largest economy, thanks to the U.S. government’s response to the coronavirus pandemic that has left many consumers overwhelmed. savings.
“I have no doubt that with surplus savings, new stimulus economies, huge deficit spending, more QE, a potential new infrastructure bill, a successful vaccine and the euphoria towards the end of the pandemic , the US economy is likely to explode, ”Dimon said. “This boom could easily last until 2023 as all spending could extend until 2023.”
Dimon, who managed JPMorgan during the 2008 financial crisis, helping to create America’s largest bank by assets, stressed that the scale of government spending during the pandemic far exceeds the response to that previous crisis. He said the long-term impact of the reopening boom will not be known for years as it will take time to verify the quality of government spending, including the $ 2 trillion infrastructure bill. President Joe Biden.
“Well spent, it will create more economic opportunities for everyone,” he said.
Dimon weighed in on a range of topics familiar to observers of the country’s most prominent banker: He encouraged JPMorgan’s efforts to create economic opportunities for Americans who have been left behind, highlighted threats to dominance US banks by fintech and big tech players, and expressed his opinion. on public policies and the role of business in contributing to change.
Jamie Dimon, CEO of JP Morgan Chase, speaking at the Business Roundtable CEO Innovation Summit in Washington, DC on December 6, 2018.
Janvhi Bhojwani | CNBC
While Dimon called stock market valuations “pretty high,” he said a multi-year boom could justify current levels because markets are pricing the economic growth and excess savings that are found in stocks. He said there was “foam and speculation” in parts of the market, but did not say where exactly.
“Conversely, in this boom scenario, it’s hard to justify the price of US debt (most people see the 10-year bond as the key benchmark for US debt),” Dimon said. “This is due to two factors: first, the huge supply of debt that must be absorbed; and second, the not unreasonable possibility that an increase in inflation will not be only temporary.”
While he is optimistic about the immediate future of the economy, there are serious challenges for the United States, Dimon said. The country has already been tested – although conflicts began with the Civil War, the Great Depression and the societal upheaval of the 1960s and 1970s, he said.
“In each case, America’s power and resilience has strengthened our position in the world, especially relative to our major international competitors,” said Dimon. “This time may be different.”
The past year has brought to light the challenges facing America’s institutions, elected officials, and families, as our nation’s rivals see a “nation torn and crippled by politics, as well as racial and income inequality – and a country incapable of coordinating government policies (fiscal, monetary, industrial, regulatory) in any coherent manner to achieve national objectives. “
The country must ultimately “go beyond our differences and our personal interests and act for the greater good,” said Dimon. “The good news is that it can be fixed.”
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