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Market Extra: ‘Growing wealth gap and rising inflation … hurt the global economy at almost every turn,’ Jamie Dimon tells MarketWatch on its anniversary

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What a difference 25 years can make. The world today is a markedly different place from the world that existed at MarketWatch’s inception in October 1997.

JPMorgan Chase & Co.
JPM,
+1.97%

CEO Jamie Dimon expressed it aptly when we reached out to him for his take on the state of the global economy and markets and his outlook for both.

Over the past 25 years, since MarketWatch’s founding, the world has grown far more polarized and unstable. And during the past few years alone, this is more true than ever before. The pandemic, George Floyd’s murder, the war in Ukraine, and supply-chain disruptions — within the context of a growing wealth gap and rising inflation — have furthered divisions, widened the wealth gap, and hurt the global economy at almost every turn.

Frankly, we are now living in a time that’s decidedly different from even five years ago, when MarketWatch was celebrating its 20th anniversary.

For one, markets have of late been in a virtual free fall, propelled lower by richer borrowing costs, as the Federal Reserve attempts to quell uncomfortably and stubbornly high inflation.

Five years ago, the 10-year Treasury
TMUBMUSD10Y,
4.016%

was yielding 2.32%, compared with around 4% now. The federal funds benchmark interest rate was in a range between 1% and 1.25%, versus 3% to 3.25% presently, with the Fed anticipated to lift rates by at least a further three-quarters of a percentage point early next month.

Against that backdrop, the Dow Jones Industrial Average
DJIA,
-1.36%
,
the S&P 500 index
SPX,
-2.23%

and the Nasdaq Composite Index
COMP,
-2.73%

are all in or near bear-market territory.

To be sure, we’re up dramatically compared with where markets stood 25 years ago, but the recent downshift has unsettled bullish investors, particularly as Russia’s invasion of Ukraine on Feb. 24 rippled throughout global markets, sparking an energy dilemma in Europe and amplifying the impact of pricing pressures rooted in the COVID-19 pandemic.

These are uncertain times, and it might feel as if the world has never been more perplexing.

I’ve been given the privilege of helping to oversee this site this year, and the vicissitudes of stocks and bonds and the concerns harbored by many of our readers have made it clearer than ever that our editors and reporters hold a tremendous responsibility: to deliver trusted financial journalism to the masses and build on MarketWatch’s legacy.

Or as Dimon notes:

News organizations with MarketWatch’s reputation and reach are needed more than ever to shine light on the issues of the day — bringing much-needed facts and unbiased analysis to help the public and policy makers make the best choices for all of society.

Our evolution as an organization has seen us
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with our inaugural Best New Ideas in Money Festival, which featured such notable participants as Ray Dalio, founder of Bridgewater Associates, the biggest hedge fund in the world, and legendary activist investor Carl Icahn.

In fact, Icahn cautioned that the worst is “yet to come” for the markets. Of course, we can hope he’s wrong. But there are a number of ways to think about such predictions. Because with fear comes opportunity.

Blackstone’s
BX,
-2.55%

Jonathan Gray, chief operating officer with the private-equity giant,
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that investors who are patient enough to wait out the volatility could emerge with rich rewards.

Gray voiced his own concerns about the wealth gap and political division, as impediments to America’s ability to collectively overcome its current challenges.

For MarketWatch, uncertainty amplifies the utility of our daily task of providing the information and context that our audience needs to make better financial decisions.

In November, as the battle between Republicans and Democrats comes to a head with the U.S.’s midterm elections, times could feel indeed precarious. While Democrats have focused on abortion and voting rights in their campaigns, Republicans have pointed attention at the inflation and crime rates, along with immigration, and the emotion surrounding those topics have only elevated anxiety among voters.

For his part, Dimon observed that true progress “does not happen overnight or by working only with people who share our views.”

“As we move forward,” he said, “businesses, community leaders and policy makers must embrace this spirit and come together so the global economy and society are better off.”

That sentiment is hard to disagree with, certainly here at MarketWatch, where, a quarter century after our founding, the democratization of financial news and information remains our guiding principle as we, in Dimon’s phrase, seek to “shine light on the issues of the day.”

Further reading:

JPMorgan CEO Dimon says inflation hasn’t dampened consumer spending yet but give it time

Stocks could fall ‘another easy 20%’ and next drop will be ‘much more painful than the first,’ Jamie Dimon says

Earnings Outlook: Tesla earnings are coming, but do record deliveries mask a demand problem?

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