CNN — Some of the top names on Wall Street think a US recession is likely, if not inevitable. But they have bigger concerns on their minds.
JPMorgan Chase CEO Jamie Dimon said Tuesday that he is more concerned about geopolitics than slowing economic growth in the United States.
“There are a lot of things on the horizon that are bad and could – not necessarily – but could put the US into recession,” he told a panel at the Future Investment Initiative conference in Riyadh, Saudi Arabia.
“That’s not the most important thing we’re thinking about. We’ll fix that. I’d be more concerned about the geopolitics of the world right now,” he told CNN’s Richard Quest, who moderated a discussion between some of the world’s most influential financiers. America at the event, also known as “Davos in the Desert.”
Dimon said he was referring to Russia’s war in Ukraine and the strained relationship between the United States and China, where leader Xi Jinping has consolidated his power and sidelined officials who pushed for reform. and opening the second largest economy in the world.
“The relations of the Western world will concern me more than whether there is a mild or slightly severe recession. [in the United States],” he added.
The breakdown of relationships — and the negative consequences for everything from national security to energy supply and food security — was a constant theme during the discussion.
Ray Dalio, the billionaire founder of hedge fund Bridgewater, said there is an “existential risk of international war.” What is needed is a “strong political middle” that is “stronger than the extremes,” he added.
Commenting on the possibility of a recession in the United States, Dimon said that while US business and consumer spending remain strong for now, Americans will likely run out of “excess money” by the middle of next year.
David Solomon, the CEO of Goldman Sachs, speaking on the same panel, also thinks that a US recession is likely.
“There’s no question that economic conditions will tighten significantly from here,” Solomon said, referring to the Federal Reserve’s interest rate hikes. “If you find yourself in a situation where inflation is embedded, it’s very difficult to get out of it without an economic slowdown,” he added, commenting that Europe may already be in recession.
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Blackstone Group CEO Stephen Schwarzman also highlighted rising interest rates and “the problems of relations between countries” as key challenges facing businesses.
To that list he added social media.
“One of the things we hardly know is how difficult it is for governments to operate in a social media world,” Schwarzman said. Initiatives to try to “make the world a better place” are brought down by “a few screaming minorities” of people trying to do something for the benefit of the world, he added.
Dimon said social media users should be authenticated in the same way people need verification to access the banking system, which would help “weed out the bots.”
Social media users should also be given a “menu of options” for algorithms that explain how each one works. “They should give you a choice as opposed to manipulating you,” he added.
Asked what kind of algorithm he would choose, Dimon replied: “I’m not looking at any of that crap.”
The Future Investment Initiative, which runs until October 27, began in 2017 as part of Saudi Arabia’s efforts to attract international investment to reduce its economy’s heavy dependence on oil.
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