JPMorgan CEO Jamie Dimon stated in an interview that the geopolitics is the greatest risk to mankind and more important than interest rates in Japan or the United States.
Dimon, in an interview with The Economic Times expressed concern about the conflict situation in Ukraine worsening. The Houthi attacks against American ships and other incidents pose a significant danger.
Dimon responded to a question regarding the US and Japan’s divergent positions on rates, yen carry trading, and whether the worst is behind us:
I think that a lot of this trade has been unwound. It worked for a long time and it will not work if Japan’s rates go up. I wouldn’t consider that a risk. I think the real risks I look at are geopolitical things. This is the most important thing. Geopolitics is more important to me than the interest rates in Japan or the United States.
Houthi attacks and oil supply in Ukraine
“Ukraine has gotten worse. The missiles are becoming more powerful. Iran, the Houthi attack on American ships in Red Sea. Dimon said that these are dangerous situations.
Dimon responded to a question about the oil price falling despite the geopolitical environment by saying that the commodity is in oversupply now, but it will likely be undersupplied a year or so later.
Supply and demand determine the price of oil and gas. This includes sentiment and inventory. Add it all up and you’ll find that there is a surplus of goods today. Europe had to change its flow due to Ukraine.
He said that this was a great example when we discussed the importance of reliable, safe, and affordable energy.
“If you look into the future, there will probably be a shortage of oil.” He said that this could be a year or even two away.
There is talk of recessions in the US, Europe and China
Dimon said that China could recover and improve from the slowdown it is experiencing.
He expressed confidence in India as well as America.
Dimon said that:
China has slowed down. Will they recover and start to pick up? Possibly. India is doing very well. America continues to do well. We haven’t had anything like that in a couple of year. I’ve never seen anyone perfectly predict the inflection point of an economy.
Dimon also emphasized the complexity of an economy.
“The economy is an enormous, complex, multifaceted beast. For example, JPMorgan moves $10 trillion a day.
Every day, investors make decisions. People go to work, send their kids to school, and buy food. That’s what drives economies.”
India’s performance, and its ambition to become a $7 trillion economy
Dimon acknowledged India’s performance was better than that of most other countries.
“I think that you guys have done an amazing job at this,” he said.
He cited the Aadhar System, banking accounts and GST reforms as well as the development of national infrastructure and the reduction in regulations, among other factors, that would help the country and benefit the lower-income population in addition to those who are wealthy.
Dimon responded that the chances of India becoming a $7 trillion economy were “very bright” when asked about the country’s financial market.
For some context, my first visit to India was in 2005. I had just been appointed CEO of JPMorgan. I went to an old building in the financial district. I think we researched 15 or 20 companies. We do research on more than 140 companies today, which helps to educate the world about Indian businesses.
He highlighted that JPMorgan had banked close to 850 multinationals and had 55,000 employees in the Corporate Centre, which supports global operations and technology.
“It’s engineering, cyber, tech, data, AI. We are building a robust payment system for our clients. All these things will make you grow. It’s possible. You need strong leadership as you do with PM Modi,” said he, ignoring the impact that the ruling party’s reduced government majority has on his view of India.
“The government is democratic, right?” “Any democracy you operate in you have to be aware that it may move around a bit, like American Democracy,” he said.
This post Geopolitics more important than interest rates in Japan, US, says JPMorgan’s CEO may be modified based on new developments.
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