The biggest bank in the world’s largest economy just posted record quarterly results showing US growth continues to start the year. But how long can it last?
According to Jamie Dimon, CEO of JP Morgan Chase, the expansion that began after the 2008 financial crisis has no expiration date. The New York-based company reported higher than expected earnings and revenue on Friday thanks to the strength of its core Main Street lending operations.
“If you look at the US economy, the consumer is in good shape, the balance sheets are in good shape, people are returning to the workforce, companies have a lot of capital,” Dimon told analysts at a conference. telephone.
“It could go on for years,” he added. “There’s no law that says this has to stop. We make lists and look at all the other things: geopolitical issues, declining liquidity. There can be a confluence of events that causes in a way or another a recession, but it may not be in 2019, 2020, 2021. “
Fears of a recession on the horizon increased last month, when bond markets signaled that economic confidence is weakening as you look away. A segment of the yield curve inverted, which means that short-term debt has paid more than longer-term bonds, a phenomenon that often precedes recessions.
But that signal isn’t a perfect predictor, and Federal Reserve officials recently left open the possibility that improving economic conditions could justify a rate hike.
If a recession were to occur in the short term, the most likely cause would be a breakdown in trade talks between the United States and China, Dimon said. But overall, the recession prediction game is a fool’s game, he said.
“Some confluence of events at some point in the future will cause a recession,” Dimon told reporters in another media call. “I don’t know what it is, no one knows what it is, and no one will ever know what they are. If you knew what they were, you would be incredibly rich.”
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