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Executive Column: JP Morgan positive on Indonesia’s outlook in volatile markets
The world economy had just gained some breathing space after two years of pandemic restrictions, only to be thrown into disarray again by high inflation, forcing authorities around the world to embark on a course of unprecedented monetary tightening.Filippo Gori, CEO of JP Morgan Asia-Pacific, spoke with The Jakarta Post’s Vincent Fabian Thomas and Mark Lempp on June 17 to discuss challenges in the global economy, capital market and banking industry.
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Filippo Gori, CEO of JP Morgan Asia-Pacific (J.P. Morgan/Public Relation Team)
T
he world economy had just gained some breathing space after two years of pandemic restrictions, only to be thrown into disarray again by high inflation, forcing authorities around the world to embark on a course of unprecedented monetary tightening.
Filippo Gori, CEO of JP Morgan Asia-Pacific, spoke with The Jakarta Post’s Vincent Fabian Thomas and Mark Lempp on June 17 to discuss challenges in the global economy, capital market and banking industry.
Question: How big a threat are stagflation and rising interest rates to the global economy?
Answer: Inflation is a topic that is top of mind, and we are seeing central banks around the world taking action to calm rising prices. We saw the [United States] Federal Reserve hiking interest rates by 75 basis points this week, the first time we have seen a move to this extent by the US central bank in 28 years. And they are not done yet; at JP Morgan, we are expecting another 1.50 percentage point rate increase this year over the next four Fed meetings.
So, we are facing a scenario of active quantitative tightening, where liquidity around the world is being removed at the same time, and it’s too early to predict how this exercise will pan out.
One thing we know for sure is that markets will continue to stay volatile over the next 12 to 18 months.
