Jamie Dimon, the CEO of JPMorgan Chase, has criticised central banks for their inaccurate economic forecasts. At the Future Investment Initiative summit in Saudi Arabia, Dimon warned against being too certain about economic outlooks and pointed out the central banks’ poor track record.
Dimon highlighted that central banks, including the Federal Reserve, were entirely wrong in their predictions 18 months ago, particularly regarding inflation. They had claimed that the inflation surge would be “transitory,” but it has proven to be more persistent.
Additionally, central banks projected that their key interest rate would reach 2.8% by the end of 2023, but it has already exceeded 5.25%, and core inflation is much higher than their estimates.
He criticised the belief that central banks and governments can effectively manage economic challenges, expressing caution.
Dimon downplayed the significance of small interest rate hikes and suggested that whether rates increase by 25 basis points or more would not make a significant difference.
Dimon also warned of the potential for the fed funds rate to reach over 7%, describing the current global situation as one of the most dangerous decades. He compared the economic climate to the 1970s, characterised by high spending levels and potential wastage.
Dimon voiced his support for these tenets of environmental, social, and governance (ESG) principles while simultaneously criticising the government for its lack of an overarching strategy. He made the point that to address issues such as lowering emissions from coal and acquiring permits for projects involving renewable energy, a more concerted effort and strategy is required.