Jamie Dimon, CEO and chairperson of JPMorgan Chase & Co., has said repeatedly in recent months that he considers it more likely than not that the U.S. economy is headed toward a recession.
But that doesn’t mean the nation’s largest bank is tapping the brakes on its plans in the Austin metro area or in Texas overall.
“We have been expanding (in Texas), we have been opening branches, we’ve been adding people,” said Dimon, who was in Austin this week to tour the bank’s local operations and meet with employees.
Austin in particular is likely to continue to outperform many cities nationwide because “it’s an attractive place to work,” he said. “You can build buildings (here), you can hire people, you have universities (and) Texas is pro-business — those thing really matter over a long period of time.”
His comments corresponded to an announcement by local officials of New York-based JPMorgan Chase that the bank is expanding its operations in downtown Austin.
The company said it has agreed to lease an additional 10,000 square feet in a new 25-story office tower — called 405 Colorado — with the aim of growing its local workforce by about 50 bankers and technology workers. The initiative will boost the number of JPMorgan Chase employees in the Austin metro area by about 10%.
The bank previously said it was leasing about 35,000 square feet on the top two floors of the new building, which will become its local headquarters and carry its branding after it relocates from its current headquarters at Chase Tower at West Sixth and Lavaca streets. JPMorgan has said it will continue to have a retail branch in the Sixth Street tower even after the relocation.
The move to the top two floors of the Colorado Street high-rise is expected to take place in the upcoming first quarter, with the company occupying the additional 10,000 square feet, which will be on the 22nd floor, by the end of next year.
JPMorgan’s planned expansion is in contrast to what has been emerging cracks in the once-booming market for office space in downtown Austin, as an increasing number of globally prominent high-tech firms with Austin operations announce sizable layoffs.
Facebook parent Meta Platforms said earlier this month that it no longer intends to occupy nearly 600,000 square feet of office space in Sixth and Guadalupe — a 66-story high-rise being built in downtown Austin — and instead plans to sublease the space. The surplus that Meta is putting back on the market adds to what has been a trend of rising sublease offerings downtown.
Dimon said this week that he’s not surprised some companies are retrenching amid the uncertain economy.
“Obviously, with all the things taking place out there in the tech world and stock volatility, some people have had to cutback,” he said. But “that doesn’t mean you won’t fill up this office space (downtown) over time.”
Dimon said he considers the probability of either a mild or “hard” recession — in which unemployment approaches 7% nationally, compared with 3.7% now — to be better than 60%. He pegged chances for a “soft landing,” meaning the U.S. Federal Reserve manages to tame inflation and cool the economy without tipping it into recession, at only 5% to 10%.
But he also cautioned that the huge amount of ongoing political and economic turmoil globally has made forecasting extremely difficult.
“What I am most concerned about is all the geopolitical effects of Ukraine, oil, gas, Russia, China, trade, emerging market countries, some of whom are starting to struggle already,” Dimon said. “So what I am saying is that the potential outcome (for the U.S. economy) is kind of unknown. If we are lucky, we will have a soft landing or a mild recession, and I do think that’s possible.”
One thing he said he’s not particularly worried about, however, is a downturn in the housing market on the scale of the 2008 crash — which is likely to be welcome news in the Austin area as the pace of home sales in the region slows after a torrid clip over the past few years.
Dimon said there has been much less speculation in the housing market than there was at the time of the 2008 crisis, and he also said lenders have been much more rigorous in vetting mortgage recipients.
“You are going to have mortgages adjust and home prices go down, but I would never call it a bubble and there’s not systemic risk where all these loans are going bad all over the place and a lot of investors lost money,” Dimon said. “You are not going to have anything like that.”
This article originally appeared on Austin American-Statesman: JPMorgan Chase chief Jamie Dimon bullish on Austin despite economic uncertainty