Jamie Timon The US economy is positive – at least for the next few years.
Timon, served for a long time J.P. Morgan Chase The CEO and Chairman sees strong growth for the world’s largest economy, thanks to the US government’s response to the corona virus epidemic, which has left many consumers stranded in savings Annual Partner Letter.
“I have no doubt that the U.S. economy will grow with more savings, new stimulus savings, greater deficit spending, higher QE, a new potential infrastructure bill, a successful vaccination and outbreak of end-of-life diseases,” Dimon said in the letter. “This boom could easily run into 2023 because all costs could be extended to 2023.”
Timon, who managed JPMorgan through the 2008 financial crisis, helped build the largest U.S. bank by assets, pointing out that the amount of government spending during epidemics is greater than responding to the previous crisis. He said the long-term impact of the reopening boom would not be known for many years to come because it would take time to determine the quality of government spending, including the $ 2 trillion proposed by President Joe Biden. Infrastructure Bill.
“Spent wisely, it will create more economic opportunity for everyone,” he said.
Timon, 65, weighs in on topics familiar to audiences of the country’s most important banker: he promoted JPMorgan’s efforts to create economic opportunities for underprivileged Americans, citing threats to the dominance of U.S. banks from Fintech and Big Tech players. , And the role of organizations that help bring about public policy and change.
Although Dimon called stock market ratings “very high,” he said the multi-year rise could justify current conditions because markets are pricing economic growth and excess savings are entering stocks. He said there were “some lungs and speculation” in some parts of the market, but did not say exactly where.
“In contrast, it is difficult to justify the price of U.S. debt in this booming situation (most people consider the 10-year bond to be the key reference point for U.S. debt),” Timon said. “This is due to two factors: first, the need to massively absorb debt; and second, the unreasonable possibility that an increase in inflation will not be temporary.”
While he is positive for the immediate future of the economy, the United States faces serious challenges, Timon said. Conflicts beginning with the Civil War, the Great Recession, and the social upheaval of the 1960s and 1970s have previously put the country to the test.
“In each case, they have seized it, despite obstacles we can scarcely imagine,” he said. “This time may have been different.”
The past year has highlighted the challenges for American companies, elected officials and families, as our country’s rivals see a nation “politically torn and paralyzed, and racially and income inequality – a country that cannot integrate government policies (financial, monetary, industrial) to achieve national goals.” Either way. “
Dimon said the country should ultimately “move beyond our differences and selfishness and act for greater good”. “The good news is it’s fixable.”
This story develops. Check back for updates.