JPMorgan CEO Jamie Dimon: Double dip recession would cause ‘pain and suffering’

JPMorgan Chase CEO Jamie Dimon expressed confidence Tuesday in America’s ability to get through next month’s election even as he urged the federal government to do more to prevent a double-dip recession.

“I have great faith in this country and I’m sure we’ll have a proper election,” Dimon told reporters during a conference call in response to a question about doubts over election results.

Speaking after JPMorgan surprised Wall Street with a profit gain, Dimon addressed Washington’s failure thus far to reach a deal on another round of fiscal stimulus.

An American flag is placed on a fence outside of the U.S. Capitol building on September 28, 2020 in Washington, DC. This week Seventh U.S. Circuit Court Judge Amy Coney Barrett, U.S. President Donald Trump's nominee to the Supreme Court, will begin meeting with Senators as she seeks to be confirmed before the presidential election. (Photo by Al Drago/Getty Images)

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“A decent stimulus package would be helpful,” Dimon said, because it would lower the chances of a double-dip recession and minimize the damage done to small businesses and unemployed Americans.

President Donald Trump shocked Wall Street last week by unilaterally calling off stimulus talks only to reverse himself by renewing a push to get a deal. But Trump’s $1.8 trillion stimulus proposal is well shy of the $2.2 trillion bill the House of Representatives passed. Crucially, Trump’s proposal faces steep opposition from House Speaker Nancy Pelosi as well as Republicans in the Senate.

“If you have a double-dip, there will be considerable pain and suffering,” Dimon said.

‘Significant amount of uncertainty’

Despite those economic concerns, JPMorgan (JPM) signaled confidence in the recovery by slightly upgrading its economic forecasts and opting not to ramp up its cushion for loan-loss reserves. Analysts had expected the nation’s largest bank to set aside billions more to cover defaults and bankruptcies.

“The consumer is in reasonably good shape for whatever we may face next,” JPMorgan chief financial officer Jennifer Piepszak said during the call. “Having said that, there is a significant amount of uncertainty about what we may face next.”

The International Monetary Fund on Tuesday downgraded its global growth forecast for next year and warned of a “long, uneven” recovery that will cause a rare increase in extreme poverty.

Returning to the office – and building a new one

JPMorgan said that in New York City and London, about 20% of its employees have returned to offices, a level the bank expects to maintain for the foreseeable future. Senior managers at JPMorgan’s sales and trading unit in those cities were asked to return the offices late last month.

“Importantly, if we see any worrying trends anywhere, and we do continue to monitor, we won’t hesitate to reverse course,” Piepszak said.

In some other parts of the country, JPMorgan said that up to 50% of employees on de-densified floors have returned to the office.

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The pandemic has not derailed JPMorgan’s plans to build a new Manhattan headquarters that will accommodate around 14,000 people. That plan, announced two years before the health crisis erupted, calls for combining workers in various New York offices into a taller building.

“I do expect New York headcount to come down over time, but we’re still building our headquarters,” Dimon said. “We’re building our headquarters for fifty years. It’s not a short-term decision.”

But Dimon does anticipate New York real estate will have a “bit of a tough time” because some companies will allow employees to work from home permanently or partially, reducing the amount of office space needed.