JPMorgan Chase CEO and Chairman Jamie Dimon gestures as he speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee’s oversight of Wall Street firms on Capitol Hill in Washington, DC on December 6, 2023 .
Evelyn Hockstein | Reuters
JPMorgan Chase Chief Executive Jamie Dimon on Wednesday urged the US to reduce its budget deficit sooner rather than later, warning that the issue would likely become “a lot more uncomfortable” if it continued to be ignored.
His comments follow a period of rapid rate hikes, tax cuts and massive stimulus programs designed to prop up the world’s largest economy during the coronavirus pandemic.
“America spent a lot of money. During Covid and post-Covid, our deficit is at 6% now. That’s a lot, but obviously that’s driving growth,” Dimon told Sky News.
“Any country can borrow money and lead to some growth, but that may not always lead to good growth. So I think America needs to be well aware that we need to focus on our budget deficit issues a little bit more, and that’s important to the world,” he added.
The federal government has so far spent $855 billion more than it took in in fiscal year 2024, according to the U.S. Ministry of Financeresulting in a national deficit.
For fiscal year 2023, government deficit spending totaled $1.7 trillion.
The deficit has piled up despite assurances from US President Joe Biden’s administration that the inflation-reducing law would shave “hundreds of billions“from the deficit, in addition to reducing prices.
Asked if the US is likely to suffer consequences in the next two years if it fails to address its deficit, Dimon said: “I don’t think it’s a big show and I don’t think it’s in the next two years. but I think that’s why we have higher inflation.”
He added: “I think if you want to do great work in your country and you have a 6% deficit and 100% debt to GDP, it can be done. [on] for a while, but the sooner we focus on it, the better.”
Dimon said he hopes the US government is “really focused” on reducing the deficit while still enjoying a period of strong economic growth.
“At some point it’s going to be a problem, and why wait?” Damon said. “The problem will be caused by the market and then you will be forced to deal with it and probably in a much more uncomfortable way than if you had dealt with it to begin with.”
“We must listen to each other”
Speaking on CNBC’s “Squawk Box” earlier this year, Dimon praised former President Donald Trump’s policy record and urged Democrats to be more respectful of Trump supporters — or risk hindering Biden’s re-election.
Dimon said on Jan. 17 that Trump was “kind of right” on issues like NATO, immigration and China.
Asked Wednesday if his comments indicated he was warming to the prospect of being asked to become Treasury secretary should Trump win a second term, Dimon said: “Absolutely not.”
“I made those comments to point out that we need to listen to each other and talk to each other, whether you agree with someone or not,” Dimon said.
“I think people need to be very clear about what policies work and what policies don’t. Whoever wins the presidency, I hope they have policies that work for both America and the free and democratic world.”
— CNBC’s Jeff Cox contributed to this report.