Jamie Dimon, chairman and chief executive of JP Morgan Chase, described the <a href="https://www.thenationalnews.com/world/us-news/2022/05/31/biden-meets-fed-chairman-powell-as-inflation-bites-into-american-wallets/" target="_blank">challenges facing the US economy </a>as akin to a “hurricane” down the road and urged the <a href="https://www.thenationalnews.com/business/economy/2022/05/11/us-inflation-remains-high-as-consumer-prices-slow-in-april/" target="_blank">Federal Reserve to take forceful measures </a>to avoid tipping the world’s biggest economy into a recession. Mr Dimon’s comments come a day after US President Joe Biden met Federal Reserve Chairman Jerome Powell to discuss inflation, which is hovering at 40-year highs. “It is a hurricane" and the current situation is unprecedented, Mr Dimon told a banking conference. “Right now, it is kind of sunny, things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don’t know if it is a minor one or Superstorm Sandy,” he said. The Fed is under pressure to decisively make a dent in an inflation rate that is running at more than three times its 2 per cent goal and has caused a jump in the cost of living for Americans. It faces a difficult task in dampening demand enough to curb inflation, while not causing a recession. “The Fed has to meet this now with raising rates and QT [quantitative tightening]. In my view, they have to do QT. They do not have a choice because there is so much liquidity in the system,” Mr Dimon said. Major central banks, already plotting interest rate increases in a fight against inflation, are also preparing a common pullback from key financial markets in a first round of global quantitative tightening expected to restrict credit and add stress to an <a href="https://www.thenationalnews.com/business/economy/2022/05/23/imf-says-global-economy-faces-biggest-test-since-second-world-war/" target="_blank">already-slowing world economy</a>. The inflation battle has become the focal point of Mr Biden’s June agenda amid his sagging opinion polls and before November’s congressional election. The chief executive of Wells Fargo, the fourth-largest US lender, said the Federal Reserve would find it “extremely difficult” to manage a soft landing of the economy as the central bank seeks to douse the inflation fire with interest rate increases. Charlie Scharf also told the conference that there was a direct impact from inflation on consumers’ spending, particularly on fuel and food. “The scenario of a soft landing is … extremely difficult to achieve in the environment that we are in today," Mr Scharf. “The economy does need to slow in order to tame inflation. If there is a short recession, that is not all that deep … there will be some pain as you go through it, overall, everyone will be just fine coming out of it.” While the overall consumer spending is strong, growth is slowing, Mr Scharf said. “Corporations are still spending, where they can they are increasing inventories … we do expect the consumer and ultimately businesses to weaken, which is part of what the Fed is trying to engineer but, hopefully, in a constructive way,” he said. Recent Fed reports and surveys reported households on average in a strong financial position, with working families doing well, and unemployment at levels more akin to the boom years of the 1950s and 1960s. Wages for many lower-skilled occupations are rising and bank accounts, on average, are still flush with cash from coronavirus support programmes. But confidence has waned and the economy topped respondents’ list of concerns in a recent Reuters/Ipsos poll. “I don’t think our crystal ball relative to the macro later this year, 2023, 2024 is necessarily any better than others. Clearly, we are going to see, with the Fed actions, different impacts in different businesses,” GE chief executive Larry Culp told the same conference.