Disturbed supply chain disruptions by manufacturers and retailers around the world are likely to work themselves out in the next few months, the chief executives of the largest banks in the United States have said.
“It won’t be a problem at all next year,” said Jamie Dimon, chief executive of JPMorgan Chase, at the Institute of International Finance conference this week. “It’s the worst part of it and the great market system will adjust for it.”
Nevertheless, the chief executives of Bank of America and Wells Fargo admitted in comments at the IIF conference that they had initially underestimated how much labor and equipment shortages would worsen the global supply chain.
“Six months ago when it was raised to me by clients across the country. . . You never thought it would get so bad, “Bank of America chief executive Brian Moynihan said on Tuesday.
Charlie Schoff, chief executive of Wells Fargo, expressed similar surprise at the extent of the disruption, but said he believed the problems were “temporary”.
The Wall Street comments come as the Biden administration is increasingly concerned that disruption of the supply chain could affect economic recovery.
The White House created a supply chain disruption taskforce in June to try to address some backlogs, from transportation to food processing and semiconductors, but the trend has not reversed.
As a sign of growing concern about the disruption, President Joe Biden will meet with top officials and other stakeholders on Wednesday to discuss “a concerted effort to remove the barriers to global transport supply discipline.”
Banks such as JPMorgan and Wells Fargo are in constant contact with commercial clients through their large commercial financing and cash management businesses, which has kept them close to the pulse of their economic threat.
“I think we understand the complex interconnection of the global supply chain and that way. People probably don’t do it more broadly,” Scarf said. Trying to add to inventory very quickly. “
Backlogs in factory, port and trucking displays have been wreaking havoc on the supply chain since the end of last year, when consumer demand from the depths of the epidemic re-emerged, dramatically surpassing supply. This trend, including labor shortages, has contributed to a significant increase in transportation costs.
Retailers responded by creating stocks, resulting in ballooning inventory and off-season promotional sales.
Moynihan said it would be too early to say whether the deficit would lead to a price increase that makes the products unreasonable: “This is a serious concern right now.”
Additional report by Joshua Franklin in New York