Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. JPMorgan Chase CEO Jamie Dimon sent his annual letter to the bank’s shareholders this morning, in which he calls for Americans to put aside partisanship and work with the rest of the world to defend democracy as the war in Ukraine rages on. “We have seen America, in partnership with other countries around the globe, come together previously during instances of conflict and crisis,” Dimon wrote. “This juncture is also a moment when our country needs to work across the private and public sectors to lead once again by, among other remediations, improving American competitiveness and better fulfilling equal access to opportunity for all.” Some key quotes from the letter: On sanctions against Russia — “They have roiled global oil, commodity and agricultural markets. We expect the fallout from the war and resulting sanctions to reduce Russia’s GDP by 12.5% by midyear (a decline worse than the 10% drop after the 1998 default). Our economists currently think that the euro area, highly dependent on Russia for oil and gas, will see GDP growth of roughly 2% in 2022, instead of the elevated 4.5% pace we had expected just six weeks ago. By contrast, they expect the U.S. economy to advance roughly 2.5% versus a previously estimated 3%. … “Many more sanctions could be added — which could dramatically, and unpredictably, increase their effect.” On a “Marshall Plan” for energy — “While the United States is fairly energy independent, we need to increase our energy production and get more gas (in the form of liquefied natural gas) to Europe immediately. Our work with all of our allies should include urging them to both increase their production and deliver some of it to Europe. To do this, we also need immediate approval for additional oil leases and gas pipelines, as well as permits for green energy projects; i.e., solar and wind. We cannot accomplish our goals with misguided and counterproductive policies.” On the Fed — “I do not envy the Fed for what it must do next: The stronger the recovery, the higher the rates that follow (I believe that this could be significantly higher than the markets expect) and the stronger the quantitative tightening (QT). If the Fed gets it just right, we can have years of growth, and inflation will eventually start to recede. In any event, this process will cause lots of consternation and very volatile markets. The Fed should not worry about volatile markets unless they affect the actual economy. A strong economy trumps market volatility.” On “the rut of false narratives” — “Our policies are often incomprehensible and uncoordinated, and our policy decisions frequently have no forethought and no identification of desired outcomes. “We sometimes blame inflation on corporate profits — for example, the cost of meat in the United States is high not because of the profits earned by the meat packing industry but because of high cattle and feed costs and disruptions in logistics. Similarly, energy costs are high not because of price gouging but because of the dramatic decline in investments in energy, which results in reduced supply when demand goes up.” Climate groups push back — In a letter to Dimon on Monday shared with MM, more than two dozen climate advocacy groups blasted the JPMorgan CEO over his so-called Marshall Plan, saying it “would further lock us into energy sources that are overly expensive and subject to wild price swings, and that exacerbate rather than ease global conflict.” Among the signatories to the letter: The Sierra Club, Public Citizen, Greenpeace, Amazon Watch, Revolving Door Project, Rainforest Action Network and the Center for International Environmental Law. They argued that the Biden administration and the private sector should be driving investments in renewable energy that help reduce emissions, and said more investments in fossil fuel expansion would do nothing to relieve short-term supply constraints. It’s not just bad for the planet, they said, it’s financially unsound. “Lobbying for fossil fuel expansion, including expanded liquefied natural gas (LNG) facilities, pits JPMorgan Chase’s short-term, profit-driven interests against the safety and stability of a world facing an unfolding climate crisis,” they wrote. IT’S MONDAY — Congrats, Tar Heels and Jayhawks fans! Your MM host will be a neutral observer of tonight’s game. Nevertheless, get those tips and story ideas in early, please: kdavidson@politico.com or @katedavidson, and aweaver@politico.com or @aubreeeweaver.
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