(ConservativeSense.com) – The chief executive of JP Morgan Chase, America’s biggest bank, has warned that inflation will continue an upward trajectory as growing global tensions push the cost of living further. Jamie Dimon said the escalating conflict in the Middle East and tensions between the US and China would increase market volatility and send fuel and food prices skyward.
In a letter to investors, Mr. Dimon noted that the US economy is at least partly fueled by government deficit spending, and cautioned that high spending will continue as the American economy transitions to accommodate climate change policies, and the global supply change is restructured. He added that healthcare costs and defense spending will “lead to stickier inflation and higher rates than markets expect.”
Meanwhile, in April, the Federal Reserve has steadied interest rates, having pushed them up last year in an attempt to slow inflation. In March, the Fed said it would leave the rate unchanged at 5.5%, but JP Morgan Chase’s Jack Manley said the current rate is fueling cost of living rises. Manley said the only way to “see meaningful downward pressure on inflation” is to reduce mortgage costs.
While some disagree with Mr. Manley, such as Kathy Bostjancic of Nationwide Mutual Insurance, others think he is correct in his assessment. Oppenheimer’s John Stoltzfus said better mortgage rates will encourage house sales, expand the market, and increase supply.
Beyond housing, other essential costs remain higher than pre-pandemic levels, and at the end of last year, most Americans said their expenses were rising faster than their salaries. Lorna Sabbia of the Bank of America noted that the Biden administration tells Americans the economy is improving, but people don’t see it in their everyday lives.
As of February this year, the average monthly living cost in the US was $3,189, or $38,266 per year. Housing costs average $1,784, transportation costs are $819, and food expenses average around $610. Prices, however, can vary wildly from state to state.
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