Jamie Dimon (68), CEO of JP Morgan, weakens hopes for a reduction in US interest rates in a letter to shareholders. This is reported, among others, by the Handelsblatt. Instead, interest rates could even rise.
Jamie Dimon: Interest Rate Rise of Eight Percent or More Possible
The official interest rate in the US is between 5.25 and 5.5 percent, writes Manager Magazin. According to Dimon, base interest rates could rise to eight percent or even higher.
“The enormous fiscal spending, the trillions needed every year for the green economy, the remilitarization of the world and the restructuring of global trade: all this has an inflationary effect,” Handelsblatt quotes from the CEO's letter. According to the Tagesschau, consumer prices in the US increased by 3.2 percent in February, but the central bank is aiming for a figure of two percent.
Last week, Neel Kashkari, currently a non-voting member of the Federal Reserve, commented on the interest rate cuts. According to the dpa, he said there might not be a rate hike this year if inflation remains high and growth remains strong.
US economy is resilient, says JP Morgan CEO
Dimon believes the U.S. economy will be resilient this year. He also believes it will continue to grow. However, he is concerned about geopolitical risks. These include, among other things, the political division in the US and the war in Ukraine and between Israel and Hamas.
The 68-year-old also commented on the topic of artificial intelligence: “We are firmly convinced that the consequences of AI will be extraordinary,” Manager magazine quoted him as saying. In his opinion, AI is like the introduction of the steam engine or the Internet, writes the Handelsblatt. At JP Morgan, artificial intelligence is said to be used in more than 400 areas.
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