A financial “calamity” forgotten in 50 years could be coming to the US, according to JPMorgan

#financial #calamity #forgotten #years #coming #JPMorgan

A leading analyst from JPMorgan Chase & Co., Marko Kolanovic reported a possible return of the United States to stagflation in the style of the 1970s, Bloomberg writes.

According to the analyst, the recent rise in consumer prices has cast a “shadow” on the economic enthusiasm that has fueled stock markets in recent months.

In addition, the latest data is likely to undermine investors’ expectations that the US economy is moving along a “Goldilocks scenario” — ie. neither expanding nor contracting too much – and will reignite fears of entering a period similar to the stagflation of the 1970s, i.e. about 50 years. Those fears were largely present in 2022, when inflation soared, but now – with inflation sharply lower and the economy defying recession forecasts – they have largely died down.

In general, the “Goldilocks scenario” involves a slowdown in economic activity to more sustainable growth rates. This scenario does not include recession and high inflation.

What remuneration did the top managers of the largest American bank JPMorgan receive for 2023

JPMorgan’s market capitalization has grown 24% over the past 12 months

“Investors should be prepared for the possibility of a scenario where interest rates rise for a longer time and the Fed may have to ‘tighten’ financial conditions,” says Kolanovic. He also noted that a halt in the downward trend in inflation or a return to price pressures “would not be a surprise” given the strong rise in stock prices, labor market pressures and high government spending.

Bloomberg notes that Kolanovic has recently taken a contrarian stance on Wall Street, with his latest concerns directed against confidence that the Fed could steer the US economy into a so-called “soft landing.”

The JPMorgan boss will sell 1 million shares he owns in the bank

What is the reason and how much will he get for them