Cautious President of JPMorgan Chase and one of the world’s most influential business leaders, Jamie DimonThe conflict in Ukraine poses a major threat to the economic recovery that began less than two years ago.
However, he called on the United States to increase sanctions pressure on Russia.
In a letter to shareholders, he emphasized that the war in Ukraine and sanctions once morest Russia would, at least, slow the global economy, and it might easily get worse, as the conflict has already caused severe disruptions to the markets for energy, agriculture and other commodities.
JPMorgan, like other big banks, has cut its growth forecasts for the US, Europe and, of course, Russia.
Dimon recalled how the 1973 oil embargo drove up oil prices, pushing the world into recession.
“More sanctions might be added, which might dramatically and unexpectedly increase their impact,” he wrote.
Dimon stated that the stimulus-driven recovery to get rid of the fallout from the Corona pandemic, the need to raise interest rates quickly to fight inflation and the war in Ukraine present a unique set of challenges.
He added, “They represent completely different circumstances from what we experienced in the past, and their convergence may lead to a significant increase in future risks, while it is possible, that all these events will have peaceful solutions, we must prepare for possible negative consequences.”
While the war in Ukraine is a test of America’s role on the world stage and Western ideals as well, Damon said, “Washington must be prepared for the possibility of a protracted war in Ukraine with unexpected results, and we must prepare for the worst and hope for the best… We must look at this on the It’s an alarm bell.”
He welcomed the “integration” of the Western world, through Europe, NATO countries, Australia, Japan and Korea, in support of Ukraine and called for closer relations.
“We need to make this a permanent and long-term stand for democratic ideals once morest all forms of evil,” he said.
To take this position, Dimon urged the United States to take several steps “immediately”, including increasing its military budget, deploying troops to NATO’s borders, directing billions of dollars in aid to Ukraine, aiding Europe in the refugee crisis and adding new sanctions on Russia.
“Lift the sanctions – there are many sanctions that can be imposed – in any way national security experts recommend to maximize the right results,” he wrote.
Although Dimon did not support specific sanctions, he stressed that solutions must be bipartisan, “because we know that only bipartisan solutions stand on solid ground.”
He suggested that the bipartisan partnership begin with the appointment of a Republican in President Biden’s government.
“Our solutions have to recognize that we are basically, unfortunately, going back to some Cold War strategy, and the Fed has to get it right,” he added.
At the same time, the economic challenge is exacerbated by the fact that the war is adding pressures to stressed supply chains and increasing food and energy costs at a time when inflation is already high. To fight inflation, the Federal Reserve is raising interest rates, perhaps quickly.
This will make things difficult for the economy and markets.
