Miami, Feb. 9 (BNA): The CEO of JPMorgan Chase & Co., the largest US bank, is warning against declaring victory in the face of inflation too early, warning that the Federal Reserve could raise interest rates above the 5% mark if high rates end. . Click “sticky”.
Dimon’s warning came after Fed officials said more interest rate hikes are on the way, though none of them are prepared to suggest that January’s hot jobs report could prompt them to take a more aggressive stance on monetary policy, Reuters reported.
Referring to inflation, Dimon said, “People should take a deep breath on this before they claim victory because the number of the month looked so good.”
“It’s perfectly reasonable for the Fed to go up to 5% and wait a while,” Dimon said.
But if inflation drops to 3.5% or 4% and stays there, “you may have to go up more than 5% and that could affect short rates and longer rates,” he said.
From a peak of nearly 7% in June, the Fed’s preferred measure of inflation stood at 5% in December – well above its 2% target but steadily lower.
In a wide-ranging interview with Reuters, Jamie Dimon warned that tighter regulation of credit card fees could lead lenders to extend less credit. He also said he plans to visit China, saying it is important to maintain relations there.
Dimon also said that a US debt default – a possibility the country faces unless its debt ceiling is raised – would likely be “catastrophic”.
“We can’t be at fault,” Dimon said. He said it could cause permanent damage to America and “could destroy its future”.
President Joe Biden, in his address to a joint session of Congress on Tuesday, urged Republicans to raise the $31.4 trillion debt ceiling, which must be raised in the coming months to avoid default.
JPMorgan said earlier that it plans to hire more than 500 bankers serving small businesses through 2024, boosting the bank’s workforce targeting the sector by 20% from more than 2,300 now.
Asked about JPMorgan’s plans for jobs given cuts at other Wall Street banks, Dimon said employment expectations remain high at the bank.
“We’re still opening branches and around the world in general, we’re still hiring bankers, consumer bankers, small business bankers, mid-market bankers, offshore individuals…we’ve got more clients to cover,” he said.
Wall Street giants including Goldman Sachs Group (GS.N) and Morgan Stanley (MS.N) have cut thousands of jobs as the worsening economic outlook dampened deal-making, while mortgage lenders cut staff.