Daily Management Review

Too Soon To Claim Victory Over Inflation, According To JPMorgan CEO


Too Soon To Claim Victory Over Inflation, According To JPMorgan CEO
The largest US bank, JPMorgan Chase & Co., warned against prematurely claiming victory over inflation and warned that the Federal Reserve could raise interest rates above the 5% level if higher prices proved to be "sticky."
Dimon issued the warning after Federal Reserve officials indicated that additional rate increases were likely, though none were prepared to say that a strong jobs report in January might force them to adopt a more aggressive monetary policy stance.
People "should take a deep breath on this one before they declare victory because a month's number looked good," Dimon said in reference to inflation.
"It’s perfectly reasonable for the Fed to go to 5% and wait a while," Dimon said.
However, he warned that if inflation falls to 3.5% or 4% and stays there, "you may have to go higher than 5% and that could affect short rates, longer rates."
The Fed's preferred measure of inflation, which peaked in June at almost 7%, was 5% in December, well above its target of 2% but steadily declining.
Jamie Dimon warned that tighter regulation of credit card fees might cause lenders to offer less credit in a wide-ranging interview with Reuters. Additionally, he declared his intention to travel to China, stressing the significance of preserving ties with that country.
Dimon added that a default on American debt, which the nation faces if its debt ceiling is not raised, could be "catastrophic."
"We cannot have a default," Dimon said. It could cause permanent damage to America and "could destroy its future," he said.
President Joe Biden urged Republicans to raise the $31.4 trillion debt ceiling in his speech to a joint session of Congress on Tuesday. This is necessary because failure to do so would result in a default.
Through 2024, JPMorgan plans to increase its staff of bankers serving small businesses by over 500, or 20%, from the bank's current workforce of over 2,300.
When asked about JPMorgan's plans for hiring in light of job cuts at other Wall Street banks, Dimon responded that the bank's hiring prospects are still positive.
"We're still opening branches and in general around the world, we are still hiring bankers, consumer bankers, small business bankers, middle market bankers, folks overseas... we have more clients to cover," he said.
As the economy continued to deteriorate and dealmaking decreased, Wall Street behemoths Goldman Sachs Group Inc.) and Morgan Stanley, as well as mortgage lenders, cut thousands of jobs.