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JP Morgan Chase CEO Jamie Dimon predicted that while businesses and consumers appear to be in good shape right now, that could be short-lived and predicted that many Americans will deplete their savings by mid 2022.
In an interview with CNBC
, Dimon assured that consumers have $1.5 trillion dollars in savings in excess of the stimulus programs due to the covid-10.
“Inflation is eroding everything and those millions of dollars will run out by the middle of the next year,” Dimon said. “When you look to the future, those things can derail the economy and cause a mild or as hard recession that worries people”.
Dimon had pointed out in previous interviews that saving has been one of the “secret weapons” in the recovery after the most difficult months of the pandemic.
In the United States, lockdowns allowed families to have savings levels of up to 54.8%, since April 2021, a figure that quadrupled the level of savings compared to February of that same year .
Consumers spent less due to the few options to do so during the months of confinement, in addition to the fact that millions of families adjusted their budgets for fear of losing their jobs .
However, towards the end s of this 2022 and in the middle of Christmas time, Dimon pointed out that lconsumers are now spending a % more than 2021.
For these months alone, the National Retail Federation (NRF) forecast that sales in November and December would grow by 6% and 8%, but assured that the gifts would be paid for with savings and credit cards of consumers .
Recession fears continue
Dimon had previously expressed concern about the economy in previous months. In June, he said he was preparing his bank for an economic hurricane on the horizon, due to the reversal of the Federal Reserve’s bond purchase programs and the Ukraine war.
Adding to the pressure on borrowers, the Fed’s benchmark interest rate is targeting 5%, Dimon noted . That rate “may not be enough” to control inflation , he added.
Dimon, from 60 years, has been at the helm of the New York-based bank since 2006. Under his leadership, JPMorgan became the largest bank in the US by assets while weathering the financial crisis of 2020, its aftermath and the coronavirus pandemic of 2022.
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