JPMorgan Chase CEO Jamie Dimon has weighed in on fiscal policy under the new Congress and expressed concerns about the overall economic impact of debt in an exclusive four-part interview that aired on “Mornings with Maria” on Tuesday.
While the US government’s debt is $31 trillion and is not “a problem today,” according to Dimon, trying to pay it off one day would be a “hockey stick” for the economy and the pocket of Americans.
“I’m talking about the day America can’t pay its debt, that could have disastrous results. Once the American debt defaults, many people can’t own it anymore and America’s debt doesn’t go beyond that,” said host CEO Maria Bartiromo. cumulative problem.
“the [Treasury bill] Defaults, and next week the T-bill defaults, next week the T-bill defaults, you should sell pension plans,” Dimon continued. It is very likely that we won’t even get close to it. And after all the shenanigans of politics, we’re going to have to fix this. I think it’s too bad that the nation is constantly looking at this kind of thing.”
JPMORGAN’S JAMIE DIMON is more bullish on the US consumer
Dimon also expressed concerns about America’s financial regulatory system, but said that “strong” consumer sentiment and the balance sheet – along with the “right” policy – could help the economy grow by 3%.
“I’m a little bit more worried about America’s regulatory system, the judicial system, the regulatory system. We’re slowing down business formation, growth, permitting infrastructure projects. We shouldn’t have infrastructure projects that take five or seven years,” argued the JPMorgan Chase CEO. “So think, if you were about to put a billion dollars into offshore wind and all of a sudden you thought you could do it in a couple of years, but it’s going to be 7 to 10 and you don’t know and you should and aside from a lot of lawsuits, would you do the billion? And that becomes a much bigger problem than dealing with certain types of smaller regulations. “
One problematic regime is US energy, according to Dimon, who has doubled down on his support for investing in domestic producers’ plans for more pipelines and drilling permits. During a House Financial Services Committee hearing last year, the CEO said stopping financing for new oil and gas products “would be the road to hell for America.”
“I think we should do things about climate and carbon dioxide, but it’s not as simple as stopping funding them,” Dimon said. “So if I can stop financing a good oil company, it won’t help. What we need are pipelines, permits. We can’t even get permits to build solar… We need a very comprehensive policy, and I don’t. I don’t think that We have that right now. I think we spend a lot of time just yelling and yelling at each other the opposite of what we need to do to achieve these very important goals of climate sustainability and resilience, efficient and effective oil price and delivery.”
Dimon made clear that he does not publicly blame or support one party over the other, but that the newly inaugurated Congress should roll out other “competent” policies in education, health care, infrastructure and even immigration.
“We need an immigration policy. We need to stop illegal immigration. We need more legal immigration,” said the CEO. “I’m going to have a heart for DACA and things like that. So if we do those things right, we’ll grow 3%.”
Rising interest rates and unbundling of balance sheets from the Federal Reserve could also create an economic “problem,” according to Dimon. The Fed indicated that it took $2 or $3 trillion in cash off its balance sheet by selling securities.
“At some point, that could cause all this volatility in the markets and things like that. And they’re going to have to deal with it when they get there,” Dimon said. “And part of it is rules and regulations, part of the money, and part of it is the financial incentive. It’s kind of a complicated thing. But I expect at some point it’s going to cause a problem.”
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Dimon noted that preparing for an economic “crisis” means gathering the best weapons in your personal arsenal to avoid economic volatility fueled by politics.
“In terms of a crisis, it’s about an army that fights it beforehand, proper margins, proper accounting, and then when it happens, you better move very quickly and kind of do the right thing,” he said. “It’s the kind of thing that Warren Buffett refers to, he doesn’t hold back, he may stop moving forward sometimes, but he’s always growing and innovating. And part of it is this very thriving economy, which we need to make sure we stay thriving.”
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