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JPMorgan chief Jamie Dimon sounded the alarm on a possible recession, warning Wall Street to prepare for the threat of rising interest rates even as inflation slows.

A lot of things out there are dangerous and inflationary. Be prepared, Dimon said at the New York Times DealBook Summit in New York on Wednesday.

Interest rates may go up and that might lead to recession,” he added, according to CNN Business.

Dimon’s comments suggest that he doesn’t forecast a rate cut following the next two-day Federal Open Market Committee meeting on Dec. 11 and 12.

Federal Reserve officials have unanimously decided to keep the benchmark federal funds rate at its current 22-year high, between 5.25% and 5.5%, for the past two policy meetings with little indication that theyll slash interest rates moving forward.

Fed Chair Jerome Powell even reiterated during his closely watched speech during the International Monetary Funds policy panel in Washington, DC, earlier this month: “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”

Economists have been divided on what central bankers’ next move is — and whether it means the US economy is in for a soft landing, which will see it skirting a recession, or a hard landing.

“Im cautious about the economy,” Dimon said, per CNN.

The 67-year-old investment banking boss also noted that “inflation is hurting people,” and in a moment of positivity, pointed to the resilient labor market.

Representatives for Dimon at JPMorgan declined to comment.

Economists have cited October’s weaker-than-expected jobs report — when the Bureau of Labor Statistics reported that the US economy added 150,000 positions — as a signal that an interest rate cut is forthcoming.

The unemployment rate is now 3.9%, the agency said, above the Feds 3.8% year-end forecast.

Inflation has also trended weaker than central bankers estimates as Americans see some reprieve from the Feds aggressive tightening cycle, which began in March 2022, when rates were between 0.25% and 0.5%.

By June of last year, inflation peaked at 9.1% and rates have since increased at a pace not seen in 40 years.

The Fed hasn’t cut interest rates in over a year despite falling inflation, which slowed to 3.2% in October, according to the Consumer Price Index, which tracks changes in the costs of everyday goods and services.

The figure marked a drop from Septembers 3.7% advance, though it remains well above the Fed’s 2% inflation target, which the US economy hasnt seen since 2012.

In an interview with Bloomberg TV last month, Dimon suggested that Americans are in for an interest-rate hike as steep as 1.5 percentage points, to a staggering 7%, which would mark the highest federal funds rate sine December 1990.

Dimon’s warnings of a recession echo those of hedge fund titan Bill Ackman, who said just this week that the Fed needs to slash interest rates as early as the first quarter in order to avert a real risk of a hard landing for the US economy.

Ackman told Bloomberg that if the Fed keeps rates around the 5.5% range while inflation trends below 3%, thats a very high real rate of interest.

Whats happening is the real rate of interest, which is what impacts the economy, keeps increasing as inflation declines, said the Pershing Square Capital Management founder.

I think theres a real risk of a hard landing if the Fed doesnt start cutting rates pretty soon, Ackman added, per Bloomberg, noting that hes seen evidence of a weakening economy.

Traders, however, arent fully pricing in a rate cut until the end of 2024s second quarter, in June, Bloomberg reported, citing swaps market data.

The chance of a cut happening in May is some 80%, the data showed.

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Trump exempts Hungary from US sanctions on Russian energy after meeting Orban

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Trump exempts Hungary from US sanctions on Russian energy after meeting Orban

Hungary has been given a one-year exemption from US sanctions on using Russian energy, a White House official has said, after its Prime Minister Viktor Orban met with Donald Trump in the White House.

Mr Orban succeeded in convincing the US president to allow Hungary to continue importing Russian oil and gas without being subject to the sanctions Mr Trump‘s administration had placed on Russian fossil fuels.

Hungary has been under heavy pressure from the European Union to end its reliance on Russian energy.

The EU has mostly heavily cut or ceased its imports of Russian oil and gas.

On 22 October, Mr Trump imposed sanctions against Russia’s two biggest oil companies, in a major policy shift described by Vladimir Putin as an “unfriendly act”.

Mr Trump has also been pushing Europe to stop using Russian energy.

Ukraine war latest: Trump gives Hungary energy sanctions relief

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Will US sanctions on Russian oil hurt the Kremlin?

Mr Orban, the country’s nationalist leader and a long-time ally of Mr Trump, has described access to Russian energy as a “vital” issue for his landlocked country.

He said he planned to discuss with Mr Trump the “consequences for the Hungarian people” if the sanctions came into effect.

Speaking at a news conference after his talks with Mr Trump, Mr Orban said Hungary had “been granted a complete exemption from sanctions” affecting Russian gas delivered to Hungary from the TurkStream pipeline and oil from the Druzhba pipeline.

“We asked the president to lift the sanctions,” Mr Orban said. “We agreed and the president decided, and he said that the sanctions will not be applied to these two pipelines.”

Mr Trump appeared to be sympathetic to Mr Orban’s pleas.

“We’re looking at it, because it’s very different for him to get the oil and gas from other areas,” he said.

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Why did Trump sanction Russian oil?

“As you know, they don’t have … the advantage of having sea. It’s a great country, it’s a big country, but they don’t have sea. They don’t have the ports.”

He added: “But many European countries are buying oil and gas from Russia, and they have been for years. And I said, ‘What’s that all about?'”

Read more from Sky News:
Putin’s right-hand man made him look weak
UPS and FedEx ground fleet of cargo planes after deadly crash

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Putin: US sanctions are an ‘unfriendly act’

Orban says ‘miracle can happen’ in Ukraine war

Mr Trump and Mr Orban also discussed the war in Ukraine, with the US president saying: “The basic dispute is they just don’t want to stop yet. And I think they will.”

The president asked Mr Orban if he thought Ukraine could win the war, with the prime minister saying a “miracle can happen”.

Hungary reliant on Russian gas and oil

As part of the discussions, Hungary agreed to buy US liquefied natural gas (LNG), the US state department said, noting contracts were expected to be worth around $600m (£455m).

The two nations also agreed to work together on nuclear energy, including small modular reactors.

Mr Orban also said Hungary will also purchase nuclear fuel from the US-based Westinghouse Electric Company to power its Paks nuclear plant, which has until now relied on Russian-supplied nuclear fuel.

International Monetary Fund figures show Hungary relied on Russia for 74% of its gas and 86% of its oil last year. It warned an EU-wide cutoff of Russian natural gas could result in output losses in Hungary exceeding 4% of its GDP.

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Why US may soon have a real energy emergency

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Why US may soon have a real energy emergency

Donald Trump declared a questionable “national energy emergency” when he entered the White House. Soon, he may have one for real.

The president promised his America would “drill, baby drill” to new levels of prosperity by making the most of its reserves of oil and gas.

Mr Trump has now axed hundreds of billions in tax breaks and grants for low-carbon power and clean energy research and given them instead to fossil fuel investments.

Construction continues on Revolution Wind but the project is not yet connected to the grid. Pic: Reuters
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Construction continues on Revolution Wind but the project is not yet connected to the grid. Pic: Reuters

There’s no better example than Revolution Wind, one of the largest offshore renewable energy projects in America.

Nearly 80% complete, the White House ordered an immediate halt.

When we visited, the massive 200m-wide turbines were going round – a temporary injunction has allowed construction to continue – but they’re not yet connected to the grid.

As long as Mr Trump is in power, it’s not certain they’ll ever be.

More on Climate Change

The future of other major wind and solar developments is also in doubt, as is more than $100bn (£75bn) in clean energy investment.

There’s less doubt about the fossil fuel business however. The industry is getting what it asked for after backing Mr Trump’s re-election.

US energy secretary Chris Wright and many key White House staff and advisers are former fossil fuel industry insiders.

Analysis for Sky News, by Global Witness, reveals that since the Paris Agreement was signed in 2015, US oil and gas production has grown five times faster than the average of the world’s next largest producers.

An increase that really took off during Mr Trump’s first presidency.

The analysis of company data goes on to reveal how US oil and gas production is now forecast to continue growing – by 2035 to double that of its next closest rival, Russia.

“Instead of reducing investment in dirty oil and gas, the principal drivers of climate breakdown, the US has doubled down on fossil fuels, ramping up production,” said Patrick Galey, of Global Witness.

A fact that would probably be music to the president’s ears and to many conservative Americans who voted for him.

US oil and gas production is forecast to grow to double that of Russia's by 2035
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US oil and gas production is forecast to grow to double that of Russia’s by 2035

Mr Trump’s “energy emergency” was perhaps a predictable response to the “climate emergency” invoked by his political rivals.

The only problem is, apart from accelerating global warming, his energy plan is on course to make America worse off.

‘US energy demand to grow 25%’

For the first time in years, US electricity demand has been going up. It is driven in part by a race to build power-hungry data centres – further encouraged by Mr Trump’s aim for American supremacy in AI.

Demand is rising and renewable energy is the quickest, cheapest way to meet it.

Data centres require vast amounts of power. Pic: Reuters
Image:
Data centres require vast amounts of power. Pic: Reuters

President Trump has championed supremacy in AI – backing investments in and clearing red tape for massive energy-hungry data centres.

After declining, then remaining stable for years, US energy demand is now forecast to grow 25% by 2030, according to analysis by ICF International.

But where will all the electricity come from?

We went to Mitsubishi Power, which makes state-of- the-art gas turbines for power stations at its factory outside Savannah, Georgia.

Demand for new turbines has never been greater, according to Bill Newsom, the US CEO. Wait times for new turbines is now double what it was just two years ago.

Mitsubishi makes gas turbines for power stations at its factory outside Savannah, Georgia
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Mitsubishi makes gas turbines for power stations at its factory outside Savannah, Georgia

And while America will need gas to meet rising demand – it’s twice as clean as coal and provides “baseload” power that renewable energy grids can’t yet match – it can’t be built fast enough.

American businesses, including AI, will likely suffer because they can’t get the power they need.

Read more from Sky News:
Trump may have another motive in war on drugs escalation

Trump raises tariffs on Canada in response to Reagan advert

US consumers – who Mr Trump promised lower bills – will end up paying more because he also made renewable energy more expensive.

And that’s to say nothing of the impact on carbon emissions.

The speed of transition being called for to meet the 1.5C Paris target was always going to be very expensive, as countries like the UK are finding out.

But by fighting one “emergency” with another, Mr Trump risks making Americans – and the climate – worse off.

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Science

Dark Matter and Dark Energy Might Not Exist After All, New Study Suggests

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A new theory suggests dark matter and dark energy may not exist. Physicist Rajendra Gupta’s model proposes that the universe’s forces weaken over time, naturally explaining cosmic expansion and galactic motion without unseen matter or energy.

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