Jamie Dimon on the Risk of Inflation and Deflation
Live Blog Update #3 Published
← Back to Full Coverage: S&P 500 INDEX (SPX) Live: Markets Pare Losses in Face of Credit Downgrade
The markets have recouped most of their losses, with the SPX now down a modest 0.03%. JPMorgan CEO Jamie Dimon believes the risks around the threat of both inflation and deflation have yet to surface in stock market values. He said at an event in New York,
“We have huge deficits; we have what I consider almost complacent central banks. You all think they can manage all this. I don’t think” they can…“My own view is people feel pretty good because you haven’t [yet] seen effective tariffs…The market came down 10%, [it’s] back up 10%; that’s an extraordinary amount of complacency.”
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Ray Dalio, founder of Bridgewater Associates, reportedly raised a flag that Moody’s downgrade of the U.S. sovereign credit rating misses a crucial point regarding the vulnerability of U.S. Treasuries. According to Dalio, the credit agency’s analysis fails to account for the inherent risk of the federal government resorting to money printing to service its massive debt.
While Treasury yields rise, the markets remain under pressure, including a 0.17% decline in the SPX ETF.
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This week, the market’s focus pivots to corporate earnings, with reports due from major players like Home Depot (NYSE: HD), Target (NYSE: TGT) and TJX Companies (NYSE: TJX). Notably, TJX stock has already climbed 11% this year so far. Comparable store sales figures will be under close examination amid ongoing high interest rates as well as signs of cooling inflation.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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