JPMorgan JPM 1.38%
Chase & Co. CEO Jamie Dimon believes that there will be a boom in the US economy, but warned that the government could waste it if ambitious spending plans are not held accountable.
The head of the nation’s largest bank reiterated his recent optimism that the economy is ready to emerge from the pandemic on fire, with growth that could extend into 2023. Dimon has said in recent weeks that the massive government stimulus, widespread vaccine rollout and actions by his business and consumer customers are prompting him to believe in a possible “Goldilocks” economy of rapid growth combined with mild inflation.
“The boom is good. Employment is good. Growth is good. Everyone should enjoy it, ”he said on Tuesday. Mr. Dimon was interviewed at The Wall Street Journal̵
JPMorgan, which quantifies some of Mr. Dimon’s bullishness now expects US gross domestic product to fully recover this quarter from the fall of the pandemic, far earlier than previously expected, according to a filing on Tuesday. The bank now predicts that GDP in the second quarter will be 0.2% higher than it had been at the end of 2019 compared to its previous forecast of being 1.9% lower. The expected growth over the next 12 months is now twice as large as the bank expected three months ago and expanded to 4.3% in the second quarter of 2022.
Yet Mr Dimon pointed to signs that left him unsure of the longevity and impact of this boom. Small businesses and lower-income workers suffered disproportionately in the pandemic, he said. Inflation is likely to rise. The stock market is priced at historic highs with pockets of excess.
Sir. Dimon also said that public spending aimed at driving economic growth will fall flat if not designed well with measurable results. For example, a highway plan must specify how many miles will be built, at what price and when, he said. Offering free tuition to community college will not work if schools are not measured by graduation and job placement rates.
“Our government, when they point out the issues that we need to do better, they are right,” Dimon said. “But if we just throw a lot of money at it and it’s all wasted again … we’ll be in big trouble.”
Government regulation, he added, has slowed growth over the years for small businesses and others.
“The can-do nation became the nation of bureaucracy,” he said.
Sir. Dimon is often asked if his interest in politics and how to govern governments will lead him to run for office, a notion he has rejected over the years. On Tuesday, he said he hoped to change how public spending plans are spoken publicly.
When he comes out of the pandemic, Mr. Dimon eager for other signs of normalcy. Several JPMorgan employees will return to the office starting this month, though Dimon acknowledged that not everyone is happy about it. But the remote office, he said, does not work to create ideas, preserve the corporate culture, compete for clients or “for those who want to penetrate.”
“We want people back at work, and my view is for a while in September, October, it will look like it did before,” Dimon said. “Yes, people do not like commuting, but so what?”
For Mr. Dimon is commuting better than the alternative.
“I’m canceling all my Zoom meetings,” he added. “I’m done with it.”
Write to David Benoit at firstname.lastname@example.org
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