Even JPMorgan Chase (JPM) CEO Jamie Dimon can’t predict the future for the economy and markets.
I asked Dimon on a media call today if an interest rate hike from the Fed would cause some of the risks he laid out in his earnings release to collide. Strategists have been baking in the possibility amid sticky inflation and hawkish comments by new Fed Chairman Kevin Warsh.
He laughed briefly and said:
“I wish I knew the answer to that question. We don’t know. We’re just isolating that there are issues out there. They’re pretty important and substantial. You know, they can easily go away. They can easily collide in a way that will surprise you. And it won’t just be the Fed and inflation. It might be a whole bunch of the geopolitical stuff, so just something to keep an eye on.”
To be sure Dimon — no stranger to dropping an economic warning or two — has some concerns he wanted to get off his chest after a record-setting quarter.
He placed them in prepared remarks on the company’s earnings release:
“However, several risks are shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices. We cannot predict how these forces will ultimately play out. They may remain manageable, but they could also cause meaningful disruptions when they shift or collide.”
Classic Dimon on both accounts.
But also classic insight for investors to chew on. Find good companies that aren’t overvalued and invest accordingly. You can’t spend every waking hour thinking about what the Fed may or may not do, or how the US’s bloated debt position will shake out. Otherwise, you are likely to miss the boat on markets (as seen in the chart above from Creative Planning strategist Charlie Bilello).
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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