JPMorgan CEO says 2022 could bring more than four rate hikes

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NEW YORK: JPMorgan Chase & Co Chief Executive Officer Jamie Dimon (pic) mentioned on Monday the financial system is producing a lot inflation that the Federal Reserve may need to lift short-term rates of interest https://www.reuters.com/markets/funds/goldman-sachs-expects-four-fed-rate-hikes-this-year-2022-01-10 more than four instances this 12 months.

Speaking to CNBC, Dimon mentioned, “It’s attainable that inflation https://www.reuters.com/markets/us/us-consumer-prices-increase-further-november-2021-12-10 is worse than individuals suppose. I, personally, can be stunned if it is simply four will increase this 12 months. Four can be very simple for the financial system to soak up.”

Dimon spoke after economists at JPMorgan and another Wall Street banks mentioned they anticipate the Federal Reserve to lift rates of interest four instances this 12 months in a faster tempo than they’d predicted earlier.

Citing indicators that the financial system is robust, Dimon mentioned customers had by no means been in higher monetary form, evidenced by excessive checking account balances, funds on debt and elevated dwelling values.

But he additionally warned that monetary markets will fluctuate no matter how the financial system goes.

“We’re anticipating that the market may have a number of volatility this 12 months as charges go up, and folks do projections and take a look at the results of rates of interest on companies in another way than they did earlier than,” Dimon mentioned.

As Dimon spoke, volatility within the inventory and bond markets continued.

Wall Street’s important indexes tumbled on falling costs for expertise shares, which have been hit laborious by expectations for larger U.S. Treasury yields. The Nasdaq was down practically 2% and about 9% under its Nov. 19 closing file.

The benchmark U.S. 10-year Treasury yield rose to its highest degree in practically two years. Investors bought the securities in anticipation that the Federal Reserve will start its tightening coverage with an curiosity rate hike as quickly as March.

The yield on the 10-year reached as excessive as 1.805%, up day-after-day this 12 months from 1.5118% on New Year’s Eve.

The Fed has already begun decreasing the tempo of asset purchases, step one in paring again stimulus measures launched through the pandemic.

“If we’re fortunate, the Fed will gradual issues down and we may have a mushy touchdown,” Dimon mentioned.

Asked about distant working insurance policies through the coronavirus pandemic, Dimon mentioned JPMorgan would proceed to be versatile on working from dwelling, offered it benefited the financial institution’s shoppers.

Last week, Citigroup Inc mentioned workers within the United States who haven’t been vaccinated towards COVID-19 by Jan. 14 can be positioned on unpaid depart and fired on the finish of the month except they’re granted an exemption.

Dimon recommended that JPMorgan’s present coverage of requiring New York City staff to be vaccinated earlier than coming to the workplace could be prolonged to terminate those that refuse to be vaccinated.

“If you are not going to get vaxxed, you gained’t be capable to work in that workplace. We’re not going to pay you to not work within the workplace,” Dimon mentioned.

On return-to-work questions, Dimon mentioned, “We do not need to reply this instantly.”- Reuters



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