JPMorgan, Goldman Sachs, Blackstone, Bridgewater, more worried about geopolitics
Some of the top names on Wall Street think a US recession is now likely, if not inevitable. But they have bigger worries on their minds.
JPMorgan Chase CEO Jamie Dimon has said he is more concerned about global geopolitics than he is about slowing economic growth in the United States.
“There’s a lot of stuff on the horizon which is bad and could — doesn’t necessarily — but could put the US in recession,” he said on a panel at the Future Investment Initiative conference in Riyadh, Saudi Arabia.
“That’s not the most important thing we think about. We’ll manage through that. I’d worry much more about the geopolitics of the world today,” he told CNN’s Richard Quest, who moderated the discussion between some of America’s most influential financiers at the event, which is also known as “Davos in the Desert.”
Dimon said he was referring to Russia’s war in Ukraine and fraught relations between the United States and China, where leader Xi Jinping has just cemented his grip on power and sidelined officials who have pushed for reform and opening up the world’s second biggest economy.
“The relationships of the Western world would have me far more concerned than whether there’s a mild or slightly severe recession [in the United States],” he added.
The breakdown of relationships — and the negative consequences for everything from national security to energy supply and food security — was a persistent theme during the discussion. Dimon and Blackstone Group CEO Stephen Schwarzman pointed to the isolating effects of the pandemic, which they said had impacted on communication between people and the ability to learn from one another.
“We’ve gotten ourselves into a situation that’s increasingly deglobalized,” Schwarzman said.
Ray Dalio, the billionaire founder of hedge fund Bridgewater, said there is an “existential risk of international war.” What is needed is a “strong political middle” that is “stronger than the extremes,” he added.
According to Dimon, at the root of many of these problems is a lack of American leadership.
“If you don’t have strong American leadership — not ugly American leadership, not ‘our way or the highway’ — just as a coalescing thing for the Western world, you’re going to have chaos like you see in Ukraine,” he said.
Commenting on the likelihood of a recession in the United States, Dimon said that while US business and consumer spending remains robust for now, Americans will probably run out of “excess money” around the middle of next year.
David Solomon, the CEO of Goldman Sachs, speaking on the same panel, also thinks a US recession is likely.
“There’s no question that economic conditions are going to tighten meaningfully from here,” Solomon said, referring to interest rate hikes by the Federal Reserve.
Source: CNN
