JPMorgan CEO Dimon ‘skeptical’ of ‘Goldilocks’ economic scenario

JPMorgan Chase CEO Jamie Dimon said Tuesday he remains “skeptical” of the “Goldilocks” economic scenario — the coveted soft landing — that financial markets are now largely expecting for the U.S. economy.

“I’m a little skeptical in this kind of Goldilocks kind of scenario. I still think the chance of it not being a soft landing are higher than other people,” Dimon said on Fox Business Network’s “Mornings with Maria.”

“That’s not terrible,” he continued. “It might be a mild recession or heavy recession.”

Financial markets, and even Treasury Secretary Janet Yellen, appear fairly confident the economy has achieved a soft landing because inflation has eased significantly over the past year without triggering a recession.

After peaking at a 40-year high of 9.1 percent in June 2022, inflation has steadily fallen, with the latest numbers from November showing consumer prices up just 3.1 percent year over year. 

While inflation remains above the 2 percent target sought by the Federal Reserve, the central bank has held interest rates steady for its last three consecutive meetings, signaling it may be nearing an end to its lengthy rate hike campaign that sought to tame inflation.

Despite the Fed’s repeated rate hikes, the economy has remained surprisingly resilient, defying previously widespread expectations of a recession. 

However, Dimon said he believes a recession is still a possibility this year, noting that consumers’ extra money from the COVID-19 pandemic is running out, interest rates remain high and the Fed’s program of quantitative tightening may still “bite.”

“All of those factors may very well push us to recession and as opposed to a soft landing,” he told Fox Business’s Maria Bartiromo.

Dimon also pointed to the current geopolitical situation, with the nearly two-year war in Ukraine and the ongoing Israel-Hamas conflict, which is threatening to expand into a wider Middle East war.

“All of these things affect oil, gas, food, migration, all economic relations around the world,” Dimon said, adding, “I put the geopolitical stuff as something you can’t look at this year and say that it will not have an effect.”