JPMorgan Chase (JPM) CEO Jamie Dimon said the post-containment economic boom has “absolutely” started.
In a customer webcast on Wednesday, the bank’s longtime CEO echoed his optimistic views on the U.S. economy which he recently outlined in his annual letter to JPMorgan shareholders in which he predicted an economic boom that “could easily run to 2023.”
Highlighting the rollout of the vaccine, Dimon said on the webcast that we are “lucky to have it” and people “should be happy to go back to work,” two factors that are “critical” to a stronger economy.
Dimon, who spoke in favor of an increase in the minimum wage, acknowledged that many have lost their jobs and are suffering from the pandemic, but believes that today’s economy is “very different” from 2009.
“For the rest of Americans, their savings accounts grew by $ 2 trillion,” Dimon said. “Home prices are on the rise. Asset prices are on the rise. They can’t wait to get back to work. There is a bit of euphoria in the places that have opened up. Even driving today in New York, driving the streets, you have a lot more mothers and schools are open. The companies are in very good shape. “
Dimon added that JPMorgan is seeing higher spending in cities that have opened up and spending on travel and recreation higher than before COVID.
“I could go on and on,” said the CEO. “It’s happening. It’s going to be a boom, and it could go on for years because the money I’m talking about, a lot of it hasn’t been spent yet, and that doesn’t include the $ 1.9 trillion. “Let’s not include infrastructure. So we’re going to have a pretty healthy economy for quite a while.”
Dimon claimed that the additional $ 2 trillion in consumers’ bank accounts would be spent over time, leading to the economic boom. In addition, Dimon noted that consumers have paid off a lot of debt, which “turns the economy on.”
“Consumers’ balance sheets are very low in debt, very high investments, very high savings, and they are ready to go, and their jobs are coming back. This is also fundamentally true for businesses,” he added. .
Certainly, there is a pessimistic scenario which is inflation. “Is he rearing his ugly head in a way that the Fed needs to take action that causes a recession?”
“The golden loops would be very strong growth this year, next year. Inflation goes up to 2.5% at the start of next year, maybe 2.7%, then it goes down. 10-year bond goes to 3, short rates go to 2 or 2.5 This would be a home run, and the effect of a strong economy eclipses the effect of rising rates, ”Dimon added.
According to Dimon, a “bad case” would be for inflation to rise to 2.7% this year and not subside and reach 3% next year, which would cause the Fed to raise rates by 50%. basis points, not the 25 basis points. people are used to it, while the 10-year bond goes to 5 or 6.
“And that’s what I call a ‘traditional recession’, when the Fed pulled the punch bowl to slow excessive growth. I don’t know if you’re going to find out until next year, so from here on out. There In 12 months it’s probably going to feel great, and then we’ll be watching it closely, ”he said.
Regarding the market, Dimon, who stressed that he hates forecasting the stock market, said a “booming economy will justify today’s prices.” The bank’s CEO said there were “bubbles out there,” but declined to name names.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.