With the recent successful performance of the US economy, the Federal Reserve has elected to keep interest rates higher for longer, with Fed Chair Jerome Powell suggesting that the Fed will collect more economic data before making any cuts In a recent letter to shareholders, JPMorgan Chase CEO Jamie Dimon outlines his concerns for the economy, claiming the bank is prepared for a wide scenario of interest rates ranging from to 2% to 8%.
UBS Investment
Bank Chief U.S. Economist Jonathan Pingle joins Market Domination to discuss the economic outlook as the possibility of higher for longer interest rates in the US persists.
Pingle elaborates on Dimon’s shareholder letter and outlines a scenario that the Fed hopes to avoid: "I think Jamie Dimon, and I think being in a bank certainly you want to assess and be prepared for any of these risks. So it could be inflation not only proves sticky but starts to resume increases. I think Chair Powell is actually worried about that risk as well. When you get to July and August, the base effects are going to flip, right? We had very low month-over-month increases in inflation in July and August of last year. You replace those with relatively strong increases and inflation… I think that’s a scenario that the Fed wants to avoid and I think that’s the kind of scenario that would put rate hikes potentially back on the table at some point."
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