Prepare for higher interest rates as US inflation stays stubborn, JPMorgan CEO Jamie Dimon says
- JPMorgan CEO Jamie Dimon said there's a chance the Federal Reserve will keep hiking rates.
- The central bank would be right to pause, he said, but given the stubbornness of inflation, they're likely to keep raising rates.
The Federal Reserve would be right in pausing its interest rate hikes, but there's a chance it could continue to hike a little more, according to JPMorgan CEO Jamie Dimon.
"My simple view is that they're right to pause at this point," Dimon said in a Bloomberg interview on Wednesday, noting that the Federal Reserve has elevated benchmark rates at the fastest pace in history, from near-zero levels to upwards of 5%. Just in May, it raised rates by 25 basis points, marking its tenth hike in a row since March 2022.
"Take a pause," Dimon said. "But I do think it's possible they're going to raise a little more. Inflation is kind of stickier, I think people are coming around to that, which means rates may have to go up a little more. People should be a little prepared for that," he added.
Despite the Fed's aggressive efforts to slow down the rate of price pressures, inflation still remains above central bank target of 2%. The latest Consumer Price Index reading showed inflation rose 4.9% through April, just below the 5.0% forecast.
Dimon is among several market thinkers bearish about the US economy. He's previously warned of a looming recession sparked by a US credit crunch, and said turmoil in the banking industry will cause repercussions for years to come.
Like Dimon, Goldman Sachs CEO David Solomon has also talked about the stubbornness of inflation, and the challenge of lowering it. Top economist David Rosenberg however holds views on the opposite end of the spectrum. He recently brushed off fears of sticky inflation as the prices of many things have are dropping fast.
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