Jamie Dimon warns the West's sanctions on Russia could have 'unintended consequences' and says market volatility is here to stay
- Jamie Dimon said the West's sanctions on Russian banks could have "unintended consequences."
- He also told investors they should get used to market volatility, given the high levels of uncertainty.
JPMorgan boss Jamie Dimon has warned the West's move to cut Russia out of the SWIFT global payments messaging system could have "unintended consequences", including potentially hurting some economies around the world.
Dimon, in an interview with Bloomberg TV, told investors they should strap in because volatility in financial markets is here to stay, after a calm 2021 that saw US stocks consistently hit record highs.
Following Russia's invasion of Ukraine, the US and its allies have moved to cut select Russian banks from SWIFT, a messaging system that underpins huge amounts of global financial transfers.
Analysts have said the move is a major blow for the Russian economy. Russia's currency the ruble crashed to a record low Monday after the sanctions were announced at the weekend, while the country's stock market remains shut in an effort to limit the falls in asset prices.
However, Dimon told Bloomberg's Ed Hammond the sanctions have thrown up "a whole bunch of issues" that Western governments need to work through.
"I think people are more worried about the unintended consequences — what countries you hurt, what people are going to do work-arounds, how you fix that."
Some analysts have suggested China could benefit from the SWIFT ban, by stepping in with its own payments messaging system and gaining more power in global finance.
Dimon said he thinks the recent jump in volatility in financial markets is sticking around. As for his reasons, the JPMorgan CEO noted the war in Ukraine is raging as the Federal Reserve is set to withdraw its support for the economy, and as US politics is increasingly deadlocked.
Investors have got to get used to it, he said. "You will inevitably have a lot of market volatility, both from the lack of bipartisanship and the reversal of QE."
He added that markets are already "kind of high."
QE refers to quantitative easing, the policy of the Fed injecting money into markets by buying bonds.
Asked about inflation, which is running at a 40-year high, Dimon said that the US had probably done "too much fiscal stimulus and quantitative easing."
He said the Fed could raise interest rates more than seven times as it tries to cool red-hot price rises.