JPMorgan Chase CEO Jamie Dimon expressed concern on Thursday about U.S. President Donald Trump’s massive tax and spending bill, stating it could bring temporary stability but is unlikely to reduce the national deficit. Dimon made these remarks during JPMorgan’s Global China Summit in Shanghai, where he acknowledged the potential for the bill to help stabilize the economy, but cautioned that it would likely add to the growing deficit.
Trump’s Tax Bill Faces Scrutiny
The tax and spending bill recently cleared a significant hurdle, with the U.S. House of Representatives voting to begin debate on the legislation, which is expected to add $3.8 trillion to the U.S. national debt over the next decade. Dimon emphasized that while the bill may provide short-term economic stability, it will likely exacerbate the country’s deficit issues.
Dimon’s Concerns About Deficit Growth
Dimon warned that the U.S. deficit would continue to grow, stressing that despite the short-term stabilizing effects of the bill, the long-term consequences could be detrimental. “I think the deficit will be large and probably growing,” he said. His comments came after Moody’s downgraded the U.S. credit rating, citing concerns over the rising national debt.
Call for Responsible Spending
Dimon called for greater fiscal responsibility, urging governments to focus on efficient spending, budgeting, and investment. He criticized the tendency of governments to spend recklessly, which he believes hampers economic growth. He specifically mentioned that the proposed tax bill does not address the underlying issues of unsustainable government spending.
Concerns About Stagflation
In addition to concerns about the national debt, Dimon also warned that the U.S. economy faces risks of stagflation, a period of stagnant growth combined with high inflation. He noted that the Federal Reserve’s cautious approach to monetary policy is appropriate given the uncertainty surrounding inflation and unemployment.
Dimon’s View on Federal Reserve Policy
Dimon supported the Federal Reserve’s decision to keep interest rates steady, recognizing the risks of higher inflation and unemployment. He expressed concern that inflation could rise and that stagflation could be a greater threat than many expect, adding to the complexity of the U.S. economic outlook.
