JPMorgan JPM 1.38%
The CEO of Chase & Co. Jamie Dimon believes a boom in the US economy is imminent, but warned that the government could waste it if ambitious spending plans are not brought to justice.
The leader of the largest bank in the country reiterated his recent optimism that the economy is ready to emerge from the erupting pandemic with growth that could expand by 2023. Mr. Dimon in recent weeks said that the huge government stimulus, widespread of vaccines and the actions of his corporate and consumer clients make him believe in a possible fast-growing Zlatokos economy combined with low inflation.
“The boom is good. Employment is good. Growth is good. “Everyone should enjoy it,”
Quantifying part of Mr Dimon’s susceptibility, JPMorgan now expects US gross domestic product to fully recover this quarter from the pandemic decline, much earlier than previously expected, according to a submission on Tuesday. Now the bank forecasts that GDP in the second quarter will be 0.2% higher than at the end of 2019, compared to the previous forecast for a decline of 1.9%. The projected growth over the next 12 months is already twice as high as the bank’s expectations three months ago, rising to 4.3% by the second quarter of 2022.
Still, Mr. Dimon pointed to signs that leave him unsure of the longevity and impact of this boom. Small businesses and lower-income workers have suffered disproportionately in the pandemic, he said. Inflation is likely to rise. The stock market is valued at historical highs, with pockets in excess.
Mr Dimon also said that government spending to stimulate economic growth would fall if not designed well, with measurable results. For example, the highway plan should specify in detail how many miles will be built, at what cost and by when, he said. Offering free tuition for a municipal college will not work if schools are not measured by degree and length of service.
“Our government is right when they point out the problems we need to do better,” Mr Dimon said. “But if we just throw a lot of money into it and everything is wasted again … we’re going to have big problems.”
Government regulation, he added, has slowed growth over the years for small businesses and others.
“The nation that can do it has become a nation with a bureaucracy,” he said.
Mr. Dimon is often asked if his interest in politics and how to run governments will make him run, an idea he has rejected over the years. On Tuesday, he said he hoped to change the way public spending plans are publicly discussed.
Coming out of the pandemic, Mr. Dimon is eager for other signs of normalcy. More JPMorgan employees will return to the office this month, although Mr Dimon acknowledged that not everyone is happy about this. But the remote office, he said, does not work to generate ideas, preserve corporate culture, compete for customers or “for those who want to hurry.”
“We want people to go back to work and my opinion is that for a while in September, October, it will look exactly like before,” said Mr. Dimon. “Yes, people don’t like traveling to work, but so what?”
For Mr Dimon, a trip to work is better than the alternative.
“I am about to cancel all my meetings for an increase,” he added. “I’m done with this.”
Write to David Benoit at email@example.com
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