JPMorgan's Jamie Dimon: "Interest Rates Above 5%... Could Exceed 6% in Recession"

[Asia Economy New York=Special Correspondent Joselgina] Jamie Dimon, chairman of JP Morgan Chase, known as the "Emperor of Wall Street," predicted that the U.S. benchmark interest rate will rise to a higher level than the Federal Reserve's (Fed) expectations. He forecasted that it could exceed 6% in the event of a mild recession.

[Image source=Reuters Yonhap News]

Attending the World Economic Forum Annual Meeting (WEF, Davos Forum) held in Davos, Switzerland, CEO Dimon appeared on CNBC's Squawk Box on the 19th (local time) and said, "Interest rates will rise above 5%" because "I believe core inflation will not disappear quickly."

Earlier, the Fed's December dot plot projected the year-end expected rate at 5.0?5.25% (median 5.1%). However, CEO Dimon, considering the significant core inflation, predicted that the final rate would rise to a higher level, dashing the market's hopes for a pivot. This aligns with the hawkish remarks from Fed officials such as James Bullard, president of the Federal Reserve Bank of St. Louis, and Loretta Mester, president of the Cleveland Fed, who suggested a final rate above 5.25% despite the easing trend in inflation indicators the previous day.

Regarding recent signs of easing inflation in the data, CEO Dimon attributed them to temporary factors such as falling oil prices and China's economic slowdown. He said, "We have benefited from China's economic slowdown and falling oil prices so far," adding, "Oil prices will rise over the next decade, and China will no longer be a factor in lowering prices."

In particular, CEO Dimon predicted that if the U.S. experiences a mild recession, interest rates will exceed 6%. In an earlier interview this month, he also stated that the Fed should raise rates to the 6% range. A rate in the 6% range far exceeds both the Fed's projections and those of major investment banks.

He viewed a recession as inevitable. He said, "There will be some degree of recession." However, he added, "I don't waste much time worrying about the recession," pointing out, "What I worry about is that misguided public policy will damage U.S. growth."

This content was produced with the assistance of AI translation services.