JPMorgan Chase's Jamie Dimon on Trump: No president wants interest rates to rise
JPMorgan Chase CEO Jamie Dimon said Thursday the Federal Reserve is right to raise interest rates in response to a growing U.S. economy, but he’s not surprised that current monetary policy has rankled President Trump.
“I’ve never seen a president who wanted interest rates to go up,” Dimon said in a call with reporters, according to the Washington Examiner.
Dimon also said Fed Chairman Jerome Powell, who assumed the role early this year, is “doing an excellent job.”
Trump has been a vocal critic of the Fed’s rate increases, saying last month that he was “not happy” with the latest hike. The president renewed that criticism this week, telling reporters that the Fed “has gone crazy” for setting higher rates. In a separate interview on Fox News’ “Fox and Friends,” Trump remarked that President Barack Obama was “playing with funny money” with near-zero interest rates during his tenure in the White House.
“I’m paying interest at a high rate because of our Fed. And I’d like our Fed not to be so aggressive because I think they’re making a big mistake,” he said.
Trump’s criticism came amid volatility in U.S. stocks, as the Dow recorded sharp declines due in part to concerns over climbing rates.
The Fed has raised interest rates eight times since 2015, including three hikes this year, with inflation growth returning and U.S. hiring maintaining a brisk pace. The central bank increases rates to prevent the economy from “overheating,” a term used to describe a scenario when fast growth causes prices to spike. Officials expect to lift the federal funds rate once more in 2018, followed by three increases next year. Investors are bracing for a potential negative impact to corporate earnings as a result of higher rates, which also raise borrowing costs for consumers.
Dimon said he expects interest rates to continue their march upward, adding that he has “much higher odds” than “most other people” of the 10-year Treasury yield hitting 4 percent. The benchmark yield sat around 3.15 percent Friday.
“The market may not take it that well if rates go up because it’ll surprise people, but people shouldn’t be surprised,” he said during an earnings call with analysts.
Despite his criticism, Trump said he has no plans to replace Powell as head of the U.S. central bank.
Trump isn’t the first president to take on the Federal Reserve, an independent government agency. After leaving office, President George H.W. Bush criticized former Fed Chairman Alan Greenspan for not cutting rates fast enough in the early 1990s, a decision that Bush credited for pushing the U.S. economy into a recession. Presidents Richard Nixon and Lyndon B. Johnson were also said to express displeasure with Fed policies during their administrations.