Crypto critic Jamie Dimon warns against inflation, says Fed likely to raise rates higher than expected
JPMorgan CEO and crypto critic Jamie Dimon issues a warning about inflation and a potential incoming financial crisis.
In Dimon’s latest annual letter to JPMorgan shareholders, he says that America’s largest bank is prepared for potentially higher interest rates, and higher and prolonged inflation.
Dimon says assets across the board, including crypto and “meme stocks,” are facing the consequences of more than a decade of quantitative easing (QE) and the rapid expansion of the money supply.
“This period of QE also led to extraordinary liquidity (and a growing money supply) which undoubtedly drove increased prices across many investment classes – from stocks and bonds to crypto, meme stocks and real estate, among others. Importantly, this also increased bank deposits from $13 trillion to $18 trillion (and the now known uninsured deposits from $6 trillion to $8 trillion).
QE is now being reversed to quantitative easing (QT) as the Fed struggles with inflation.”
The banker says investors expecting a pivot from the Federal Reserve may instead have to prepare for interest rates to go much higher than some expect when the economy enters a recession in the 1970s or 1980s.
“If we have higher inflation for longer, the Fed may be forced to raise interest rates higher than people expect despite the recent banking crisis. QT (quantitative tightening) may also have ongoing impacts which over time may be another force, pushing long-term rates higher than currently envisaged. This could happen even if we have a mild – or not so mild – recession, as we saw in the 1970s and 1980s.”
Some crypto insiders hold opposing views to Dimon’s. Former Goldman Sachs director and macro investor Raoul Pal has been calling for a Fed pivot since late last year.
ARK Invest’s Cathie Wood has predicted that once the Fed pivots, Bitcoin (BTC) and blockchain technology will emerge as the top risk assets.
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered straight to your inbox
Check price action
Follow us on TwitterFacebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/solarseven/Andy Chipus
