Economists echo Dimon’s concerns as US credit downgrade and tariff-driven uncertainty continue.
JPMorgan Chase CEO Jamie Dimon has warned that he can’t rule out the possibility that the United States will fall into what is called stagflation— an economic term that refers to a period when inflation and unemployment are high as economic growth is slow.
In an interview with Bloomberg Television on Thursday, Dimon said, “I don’t agree that we’re in a sweet spot” in response to a question about some US Federal Reserve officials saying that the US economy was in a sweet spot.
Dimon made his comments while at JPMorgan’s Global China Summit in Shanghai. His comments come against the backdrop of the US facing increasing geopolitical tensions, rising deficits and pressure on consumer prices from changing government policies on tariffs that have led retailers to announce a need to raise prices and left businesses in a wait-and-watch mode over all the economic uncertainties.
Economists like Stuart Mackintosh, executive director of the financial think tank Group of Thirty, echoed Dimon’s concerns to Al Jazeera.
“Stagflation is a real risk we cannot rule out. We’re in a circumstance where we have uncertainty on tariffs, uncertainty on many policies that increase the downward pressure on growth in America.”
Last week Moody’s Ratings downgraded the US economy’s credit rating. The firm lowered its gold-standard Aaa to an Aa1 credit rating for the US, citing its growing national debt.