JPMorgan is preparing for a range of scenarios where rates could drop as low as 2% or head to “8% or even higher,”
“Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world and the restructuring of global trade—all are inflationary,” Dimon wrote.
He said JPMorgan is preparing for a range of scenarios where rates could drop as low as 2% or head to “8% or even higher,” based on where the economy is headed. He has warned about inflationary risks in previous letters, in both 2022 and 2023, too.
Dimon said an outcome, which implies that inflation quickly returns to the Fed’s 2% target from higher levels now, is less likely than subdued bond yields and record stock indexes would seem to imply.
“These markets seem to be pricing in a 70% to 80% chance of a soft landing,” Dimon wrote.
“I believe the odds are a lot lower than that.”
Wall Street Journal 8 April 2024
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