JPMorgan CEO Warns of 2 ‘Extraordinary’ Storm Clouds Hitting US Economy With Potential ‘Bad Outcomes’
JPMorgan Chase CEO Jamie Dimon has warned of two “extraordinary” things happening today that may have “bad outcomes” for the U.S. economy. Moreover, the executive has urged investors and businesses to be prepared for higher interest rates. “I don’t think inflation will keep going down,” he noted, adding that in the worst-case scenario, you will see “a lot of people struggling.”
Jamie Dimon’s Storm Clouds
JPMorgan Chase CEO Jamie Dimon shared his economic outlook in an interview with Bloomberg earlier this week. Regarding the broader U.S. economy, he said:
There are two things which are extraordinary today, which may have different outcomes — think of them as storm clouds.
“We don’t know if they are going to hit, when they are going to hit, what they are going to do, so I’m not predicting that,” he added. The JPMorgan executive began talking about storm clouds hovering over the U.S. economy last year. At the time, he cautioned that it could actually be a hurricane. However, earlier this year, he clarified that he shouldn’t have used the word “hurricane.”
Nonetheless, the JPMorgan CEO shared with Bloomberg Monday: “But I’ll tell you what I worry about. One is the fiscal money being spent is so big, the largest in peacetime ever — America and kind of around the world — with very high deficits and QT we’ve never had.” He continued. “I don’t think inflation will keep going down. It may not. Therefore, rates may go higher.”
Dimon stressed: “The biggest storm cloud is geopolitical. It’s Ukraine, the humanitarian crisis. It is a war not far from here … 500,000 people have been killed. It is nuclear blackmail. It’s going to affect all global relationships in America and China, trade alliances.”
The JPMorgan boss added: “We don’t know the effect of these things. The economy, we may have a soft landing, we may have a mild recession, we may have a harder recession. Obviously, there are potential bad outcomes.”
Reiterating his recent warning that the Federal Reserve could raise interest rates to 7%, Dimon emphasized: “Be prepared for higher rates and slow growth … The worst [outcome] economically would be stagflation.” He cautioned:
Obviously, if that happens, you’re going to see a lot of people struggling.
What do you think about the warnings by JPMorgan Chase CEO Jamie Dimon? Let us know in the comments section below.
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Ledger Faces Industry Downturn: Announces 12% Workforce Reduction
According to a recent report by Bloomberg, Ledger, a prominent hardware wallet manufacturer catering to crypto investors, has announced a 12% reduction in its workforce as part of a strategic effort to navigate an extended industry downturn.
The decision comes in response to macroeconomic challenges that have hindered revenue generation, prompting the company to prioritize the long-term sustainability of its business.
Market Challenges Force Ledger CEO To Make ‘Difficult Decisions’
Ledger’s CEO and Chairman, Pascal Gauthier, highlighted the need to make difficult decisions in the face of prevailing market conditions. In an email sent to staff, Gauthier acknowledged the impact of macroeconomic headwinds and emphasized the importance of preserving resources for the company’s future. Gauthier further claimed:
Macroeconomic headwinds are limiting our ability to generate revenue. We must continue to make decisions for the longevity of the business
While a Ledger spokesperson confirmed the layoffs, details regarding the affected employees were not disclosed. This development comes as the crypto industry grapples with various challenges, including rising interest rates and increased regulatory scrutiny.
These factors have contributed to a turbulent environment characterized by reduced trading volumes, decreased funding, and a notable decline in interest and prices of once-popular segments like non-fungible tokens (NFTs).
Researchers at dappGambl estimate that approximately 95% of over 73,000 NFT collections have lost significant value.
In response to these industry-wide struggles, numerous crypto companies, including large exchanges, trading firms, and service providers, have been compelled to implement cost-cutting measures and downsize their workforce.
Recent examples include blockchain data firm Chainalysis, which laid off 15% of its staff, and blockchain technology company R3, which let go of over a fifth of its employees.
Ledger’s Valuation Soars To €1.3 Billion
Established in 2014, Ledger has emerged as a leading provider of secure hardware devices designed to safeguard private keys, which grant users access to their blockchain assets.
Heightened concerns among users regarding the safety of their holdings, exacerbated by the fall of crypto exchanges like FTX and high-profile hacks in the past year, led to increased demand for Ledger’s products and those of its competitors.
Per the report, earlier this year, Ledger successfully raised approximately €100 million ($109 million) in a funding round, valuing the company at around €1.3 billion.
This valuation closely aligns with the price tag assigned by investors during the bullish market 2021. Ledger asserts that its devices store over 20% of the world’s cryptocurrencies and 30% of the global NFTs.
The decision to downsize the workforce reflects Ledger’s response to the challenging market conditions as the company seeks to adapt and navigate the evolving landscape of the crypto industry.
Featured image from Shutterstock, chart from TradingView.com
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