JPMorgan's Dimon, Goldman's Solomon voice concerns on economy

In recent interviews, JPMorgan Chase (JPM) CEO Jamie Dimon believes a hard-landing scenario for the US economy is still possible while Goldman Sachs (GS) CEO David Solomon expects the Federal Reserve will keep interest rates higher for even longer based on AI efficiencies.

Yahoo Finance's The Morning Brief report on these Big Bank reactions after the release of May's FOMC meeting minutes and what these comments say about overall confidence for the Fed's 2% inflation target

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video transcript

Well.

Other big story for the markets here.

Rate cut risks Goldman Sachs CEO David Solomon says that the Fed won't cut rates this year as a I power deficiency keeps the economy resilient.

And JP.

Morgan CEO Jamie Dimond says a hard landing for the US cannot be ruled out.

That's according to C NBC.

And of course, we have to kind of take into consideration here what the Fed meeting minutes are also saying right now.

And in those meeting minutes in this most recent meeting, they noted, the FO MC noted their uncertainty about the persistence of inflation and some of the participants pointing out here geopolitical events, other factors resulting in even more severe supply bottlenecks.

Higher shipping costs continuing to put upward pressure on prices and weigh on economic growth.

Right now, so very much a tone or a vibe in that room.

It sounds like that they are definitely not out of the woods as of right now, and it's still a question mark about whether or not at least among some of the participants, whether or not they should still be hiking or holding for longer.

How long they should be holding for Yeah, and that's That's very similar to what we heard from Diamond yesterday in his interview with C NBC.

It was over in Shanghai at JP.

Morgan's summit there, and he was just talking about the fact that inflation obviously a lot stickier than what many forecasters had anticipated at this point.

Exactly like you what you just said, what we learned from the Fed meeting minutes yesterday.

There's this narrative shift.

It seems like it's happening amongst policy makers.

More and more are starting to take a little bit of issue or more concern with the sticky inflation and questioning whether or not the policy right now at at its current level, whether or not it is restrictive enough.

And I think that leads us then to the commentary that we got from David Solomon yesterday when he went on to say that there is that he does not see any compelling data at this point to support rate cuts at this time.

He's talking about the fact that the average American still feeling the pinch from higher prices he used, he referenced McDonald's recent results.

He referenced the recent results that we got an auto zone just showing the fact that consumers are pulling back on spending when you see the inflation levels elevated still very high from what the Fed wants to see clearly, a lot higher than that 2% rate, that we're at the 2% level that they're hoping we do come back to it.

It is getting tougher for policymakers to make the case, and even for many of the forecasters out there to feel confident, maybe at this point that we are going to be getting multiple rate cuts here before the end of the year.

Yeah, absolutely.

Well, if we don't get any of those rate cuts by the end of the year, then the Fed will have accomplished its job and looking apo at least.