JPMorgan's Jamie Dimon says interest rates 'may go up more,' says he hopes for soft landing
Dimon also said he was unsure 'if the world is prepared for 7%'
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JPMorgan Chase CEO Jamie Dimon recently weighed in on the path U.S. interest rates could take in the future.
He told The Times of India interest rates "may go up more" but added that he "hope[s] and pray[s] there is a soft landing," according to an article published Tuesday.
The range of the Federal Reserve’s benchmark interest rate sits at 5.25% to 5.5%, where it has hovered since late July, and the Fed Reserve elected to maintain that rate last week.
Jamie Dimon, billionaire and CEO of JPMorgan Chase after a Bloomberg Television interview at the JPMorgan Global Markets Conference in Paris May 11, 2023. (Cyril Marcilhacy/Bloomberg via Getty Images / Getty Images)
The JPMorgan Chase CEO was asked about what risks the U.S. faces with an economic hard landing.
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The Times of India quoted him as saying "no one knows" the chances and that "there is a range of outcomes." He pointed to potential factors that include "Ukraine, oil, gas, war, Europe."
"I would be cautious. I think we are feeling pretty good because of all the monetary and fiscal stimulus," he told the outlet. "But it may be a little more of a sugar high. We have to deal with all these serious issues over time, and your deficits can’t continue forever."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 250.53 | +0.78 | +0.31% |
The question of whether the U.S. economy will see a soft or hard landing has repeatedly surfaced over the past year and a half. It has done so as the Federal Reserve has tried to lower inflation.
Jamie Dimon, chairman and CEO of JPMorgan Chase, during a House Financial Services Committee hearing in Washington, D.C., Sept. 21, 2022. (Al Drago/Bloomberg via Getty Images / Getty Images)
In that time frame, the central bank has made the decision to lift interest rates multiple times.
Dimon also said he felt unsure "if the world is prepared for 7%," according to The Times of India.
"I ask people in business, ‘Are you prepared for something like 7%?’ The worst case is 7% with stagflation," he added. "If they are going to have lower volumes and higher rates, there will be stress in the system."
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He said JPMorgan Chase recommends to its clients to be ready for "that kind of stress."
"Warren Buffett says you find out who is swimming naked when the tide goes out," Dimon said. "That will be the tide going out. These 200 bps will be more painful than the 3% to 5%."
JPMorgan Chase & Co
Dimon, who has led JPMorgan Chase 17 years, previously said interest rates going from zero to 2% "was almost no increase." Some people were caught off guard by them climbing to 5%, he added.
FOX Business reported last week that the central bank opened the door to another quarter-point increase before 2024 and indicated it would hold rates at those elevated levels for a while.
An eagle tops the U.S. Federal Reserve building's facade in Washington July 31, 2013. (REUTERS/Jonathan Ernst / Reuters Photos)
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As of early Tuesday afternoon, the CME Group’s FedWatch Tool put the likelihood of the U.S. central bank keeping the current rate at 74.6% at its next FOMC meeting. Meanwhile, 25.6% projected the target rate could become 550 to 575 basis points.
Megan Henney contributed to this report.