This week during the 40th annual JP Morgan Health Care Conference, JPMorgan Chase CEO and Chairman Jamie Dimon announced his forecasts for the outlook for the US economy and the stock market in 2022.
JPMorgan Chase is the largest US bank by assets and the most valuable bank in the world, with a market capitalization of $490 billion.
Jamie Dimon believes that in 2022 the United States will see the best economic growth in decades.
"We will have the best growth we have ever had, I think, possibly after the Great Depression," Dimon told CNBC during the conference. "Economic growth next year (2023) will also be good."
The head of the bank said his confidence is based on strong indicators of American consumer behavior and their bank balance sheets: “The consumer balance has never been in better shape; today they spend 25% more than before the pandemic. At the same time, their debt service ratio is the best in the last 50 years. "
As for the stock market, Dimon believes that the rise will continue even if the Fed raises rates, perhaps more than investors expect.
Economists at Goldman Sachs (GS) are forecasting four rate hikes this year, with Wall Street analysts' average estimates hovering in the 3-4 hikes range.
Dimon believes that inflation is likely to be worse than expected by the Fed, and the number of interest rate hikes will be more than current expectations.
“Personally, I would be surprised if there were only four promotions,” said Daimon.
Banks' profits and their shares tend to rise in the face of rising central bank interest rates. The KBW Bank Index jumped 10% last week, marking the best start to the year in decades for this index of 24 companies.
Nonetheless, Dimon said that while the underlying economy looks strong, stock market investors could face a tumultuous year as the Fed begins tightening policy.
“The market will be different,” said Daimon. “We expect the market to be more volatile this year as rates rise and investors will re-evaluate current forecasts.”
Dimon also added that if the Fed manages to change its policy smoothly, "slowing down the course of events", the market will not experience a sharp and prolonged collapse.
JPMorgan Chase is up 19.45% in the past 12 months and 4.8% in the past month. On January 5, the bank raised its annual dividend to $4, with an annual dividend yield of 2.39%.
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