JPMorgan CEO: High inflation may derail US economy into recession

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ISTANBUL – JPMorgan Chase chief executive officer Jamie Dimon said Tuesday that record inflation may derail the United States economy and cause a recession in 2023.

Dimon said American consumers have saved $1.5 trillion from stimulus programs during the coronavirus pandemic but they are now spending 10 percent compared to 2021 because of higher inflation.

“Inflation is eroding everything I just said, and that trillion and a half dollars will run out sometime mid-year next year,” Dimon told US network CNBC’s Squawk Box.

The 66-year-old veteran CEO said the US Federal Reserve’s aggressive monetary tightening cycle is causing its benchmark interest rate to climb toward 5 percent and even that level “may not be sufficient” to overcome inflation.

“When you’re looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about,” he said.

The Fed raised interest rates by 75 basis points on Nov. 2 for a fourth consecutive time, raising the target range for the federal funds rate to between 3.75 percent and 4 percent –its highest since January 2008.

The aggressive rate hikes have caused annual consumer inflation to come in at 7.7 percent in October, easing from the 8.2 percent gain in September. 

Annual producer inflation rose 8 percent in October, slowing from September’s 8.4 percent gain year-on-year. (Anadolu)

House committees to hold hearings during break

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Spread the loveMANILA – The House of Representatives has authorized for its committees to conduct hearings during the five-week congressional break, extending until late April.