According to a report published by The Daily Hodl earlier today, Jamie Dimon, the Executive Chairman CEO of JPMorgan Chase, reportedly has predicted a forthcoming pause in the Federal Reserve’s rate hikes. However, this pause comes with a significant catch that could impact risk-asset investors.
According to The Daily Hodl, during an interview with Bloomberg on May 31, 2023, Dimon indicated that a pause in rate hikes is likely the appropriate course of action at this juncture. However, he also reportedly suggested that after this pause, the Fed might need to resume increasing interest rates to control inflation, which he believes will be more persistent than initially anticipated.
Dimon reportedly stated that there had been a substantial increase in the basis points and that a pause is warranted at this point. However, he also suggested that people should be prepared for the possibility of rates going up a little more due to stickier inflation.
The JPMorgan CEO also warned about the potential volatility caused by quantitative tightening. As reported by The Daily Hodl, Dimon stated that we’d had quantitative easing for the better part of 15 years, and now we’re going to see quantitative tightening, the effects of which might be harsher than people expect.
In his letter to shareholders in the JPMorgan Chase & Co. 2022 Annual Report issued April 3, 2023, Dimon reportedly stated that the bank is prepared for potentially higher interest rates and longer-lasting inflation. He reportedly suggested that assets across the board, including crypto and “meme stocks,” are about to face the consequences of more than a decade of quantitative easing and the rapid expansion of the money supply.
Dimon reportedly pointed out that this period of quantitative easing led to extraordinary liquidity and undoubtedly drove increased prices across many investment classes, including stocks, bonds, crypto, meme stocks, and real estate, among others. He also noted the increase in bank deposits from $13 trillion to $18 trillion.
According to The Daily Hodl report, Dimon stated that quantitative easing is now being reversed into quantitative tightening as the Fed grapples with inflation. He reportedly warned that the effects of this shift might be harsher than people expect but expressed hope that we’ll get through all of that and be okay.