JPMorgan's Dimon says more stimulus needed, warns businesses won't survive more coronavirus lockdowns
Bank exec urges lawmakers to step up more federal stimulus
JPMorgan CEO Jamie Dimon says another year of lockdowns aimed at slowing the spread of COVID-19 would deal a knockout blow to businesses reeling from the pandemic.
“There are a lot of people who are under a lot of stress and strain who won't be able to survive another year of complete closedown,” Dimon said on JPMorgan’s third-quarter conference call on Tuesday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JNJ | JOHNSON & JOHNSON | 155.39 | +0.88 | +0.57% |
Dimon thinks a continuation of some type of unemployment insurance and the Paycheck Protection Program (PPP) will “skew the odds of having a better outcome" for the fragile economy.
He added that a return to offices that is “done properly” will go a long way to helping alleviate the problems being experienced by all of the businesses that support big office towers and buildings.
At the height of the pandemic, the Federal Reserve and Congress sprang into action to cushion the economy as lockdowns forced nonessential businesses to close their doors for months nationwide. As a result, more than 60 million Americans, at least temporarily, lost their jobs in what has been the sharpest economic slowdown of the post-World War II era.
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To combat the crushing blow, the central bank slashed interest rates to near zero and pledged to buy unlimited assets while Congress deployed about $3 trillion through a series of programs and are in the process of negotiating more aid. Fed Chair Jerome Powell has also urged lawmakers to push another round of aid.
On the fiscal side, the $2.2 trillion "Coronavirus Aid, Relief, and Economic Security" or CARES Act, which was the biggest stimulus package in history, increased unemployment benefits by $600 per week for three months and established the PPP, providing grants and loans to small businesses, among other things.
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But that money has run out and Democrats and Republicans are at a stalemate in negotiations, leaving millions of Americans and business owners in the lurch about what their futures hold.
Already, more than 100,000 small businesses have closed. Restaurants have been particularly hit hard and with winter looming ending many outdoor dining opportunities, restaurant owners in cold-weather states -- that have yet to return to full indoor dining -- are fearing the worst.
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Additionally, the dread of a second wave of COVID-19 infections has stoked concerns that another round of lockdowns could be initiated. Earlier on Tuesday, Eli Lilly and Johnson & Johnson both halted COVID-19 vaccine trials due to safety concerns.
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| LLY | ELI LILLY & CO. | 789.66 | +35.41 | +4.69% |
| JNJ | JOHNSON & JOHNSON | 154.51 | -1.24 | -0.80% |
Former Vice President Joe Biden, who is ahead of President Trump by 10 points in several national polls including the most recent Fox News poll, has said he would follow the science and re-lockdown the country to help slow the spread if necessary.
Trump, for his part, has ruled out more lockdowns and has also urged lawmakers to pass another round of stimulus.
On Tuesday, Senate Majority Leader Mitch McConnell (R-KY) said that the first order of business when the full Senate returns is to debate another COVID-19 relief package.