JPMorgan Chase CEO Jamie Dimon Sounds Alarm on Ballooning US Fiscal Deficit Due to High Government Spending

By Jace Dela Cruz

May 16, 2024 10:07 AM EDT

JPMorgan Chase CEO Jamie Dimon has cautioned that the United States should promptly address its ballooning fiscal deficit to avoid future economic turmoil.

In an interview with Sky News on Wednesday, Dimon partly blamed the high government spending for the rising inflation levels.

Top Wall Street CEO's Testify At Senate Banking Hearing
WASHINGTON, DC - DECEMBER 06: Jamie Dimon, Chairman and CEO of JPMorgan Chase, testifies during a Senate Banking Committee hearing at the Hart Senate Office Building on December 06, 2023 in Washington, DC.
(Photo : Win McNamee/Getty Images)

JPMorgan Chase CEO Jamie Dimon on the US Fiscal Deficit

Jamie Dimon said that although massive government spending has propelled growth, it still has a downside.

"America has spent a lot of money. During COVID and after COVID, our deficit is at 6% now. That's a lot, but obviously that drives growth... Any country can borrow money and drive some growth, but that may not always lead to good growth," Dimon told Sky News.

"So, I think America should be quite aware that we have got to focus on our fiscal deficit issues a little bit more, and that is important for the world," he added.

Dimon said that while the consequences of not controlling federal spending may not happen within "the next couple of years," he thinks this is why we have higher inflation now. He then emphasized the importance of focusing on fiscal deficit issues to maintain global economic stability.

According to the US Treasury Department, the Biden administration has spent $855.1 billion more than it collected in the fiscal year 2024, which started last October. This has resulted in a national deficit.

The fiscal 2023 deficit reached $1.7 trillion, higher from $1.4 trillion in fiscal 2022. On the other hand, the national debt, which recently exceeded $34 trillion, is projected to surpass $45.7 trillion within a decade, according to the Congressional Budget Office's projections.

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JPMorgan Chase CEO Jamie Dimon Urges US Government to Focus on Reducing the Deficit

Jamie Dimon noted that a 6% deficit and 100% debt to GDP can go on "for a while" without suffering consequences, "but the sooner we focus on it, the better." He urged the government to focus on reducing the deficit while maintaining robust economic growth.

"At one point it will cause a problem and why should you wait? The problem will be caused by the market and then you will be forced to deal with it and probably in a far more uncomfortable way than if you dealt with it to start," Dimon noted.

READ MORE: JPMorgan Chase Australia Fined Over $500,000 for Allowing Suspicious Client Orders on Wheat Futures Trading

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