(Bloomberg) -- JPMorgan Chase & Co. (NYSE:JPM) Chief Executive Officer Jamie Dimon warned of a “hurricane” as the economy struggles against fiscally induced growth, quantitative tightening and Russia’s invasion of Ukraine.
Dimon, who had said in May that there were storm clouds looming over the US economy, said he wanted to change that assessment given the challenges faced by the Federal Reserve as it braces for an unprecedented environment.
“I said there were storm clouds, big storm clouds. It’s a hurricane,” he said at at conference sponsored by AllianceBernstein (NYSE:AB) Holdings Wednesday. “Right now it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle it. That hurricane is right out there down the road coming our way. We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself.”
Shares of the company dropped 1.8% to $129.90 in New York after Dimon’s remarks on the economy, extending this year’s decline to 18%.
He said JPMorgan is shoring up for turbulence by being conservative with its balance sheet and preparing to take actions “with all this capital uncertainty.”
“I kind of want to shed non-operating deposits again, which we can do in size, to protect ourselves so we can serve clients in bad times,” he said. “That’s the environment we’re dealing with.”
Still, he noted the strength of the consumer, rising wages and plentiful jobs as the “bright clouds out there.’”
“But it’s different: The Fed has to meet this with raising rates and QT. The new part of this isn’t the rising rates, it’s the QT.”
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