Jamie Damon: Get ready for a financial ‘hurricane’

JPMorgan CEO Jamie Damon has warned investors to prepare for a financial “hurricane” as the economy faces an unprecedented mix of challenges, including tightening monetary policy and Russia’s invasion of Ukraine.

“The hurricane is out there on the road and coming towards us,” JPMorgan Chase, chief executive, told a conference of AllianceBernstein Holdings on Wednesday, according to Bloomberg.

“We do not know if it is a small or super storm. But you better prepare,” he said.

On JPMorgan Investors Day in May, J. Damon had said that “storm clouds” were shadowing the US economy, but told the conference that he had since updated his assessment of the challenges facing the US Federal Reserve as it seeks to tame inflation.

“It’s a little sunny right now, things are going well, everyone thinks the Fed can handle it,” he said.

It is noted that JPMorgan economists last month downgraded the growth outlook to 2.4% from 3% for the second half of 2022, to 1.5% from 2.1% for the first half of 2023 and to 1 % from 1.4% for the second half of 2023.

In their analysis, they pointed to the fall of shares, the increase of mortgage interest rates and the strengthened dollar against the currencies of the US trading partners.

For his part, Jamie Damon said JPMorgan was preparing for the turmoil by taking a conservative approach to its balance sheet.

“I want to reduce non-performing deposits a bit, to protect ourselves so that we can serve customers in difficult times,” he said, noting that “this is the environment we are dealing with.”

The strongman of JPMorgan, however, referred to the increased consumer power, wage increases and abundant jobs, saying that they are “bright clouds” in the economy.