JPMorgan Chase CEO Jamie Dimon on Tuesday urged the Federal Reserve to wait until after June before cutting interest rates, arguing the central bank needs to shore up its inflation-fighting credibility.
"I think they have to be data-dependent. If I were them, I would wait," Dimon said at the Australian Financial Review business summit via a livestream from New York. "You can always cut it quickly and dramatically. Their credibility is a little bit at stake here. I would even wait past June and let it all sort it out."
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Markets see an 84 per cent probability the Fed will lower rates in June and have priced in 90 basis points of cuts for the year.
Dimon said the U.S. economy was doing so well it could almost be characterised as a boom, but cautioned against the wholesale embrace of the soft landing narrative by markets. He put the odds of a recession of some sort at about 65 per cent and refused to rule out the possibility of stagflation.
Dimon said the surge in debt and equity markets since late 2023 had some bubble-like characteristics and linked it in part to the legacy of the pandemic-era fiscal and monetary stimulus, which was "still in the system, you can't say that they're gone".
Long a critic of bitcoin, Dimon said a lot of the practical uses for the cryptocurrency were illegal activity like sex trafficking, fraud and terrorism.
"I don't know what the bitcoin itself is for, but I defend your right to smoke a cigarette, I'll defend your right to buy a bitcoin," he said. "I won't personally ever buy a bitcoin." Dimon also weighed in on artificial intelligence and said JPMorgan had two thousand people working on 400 use cases for the technology at the bank. At home he uses AI to summarise books he does not have time to read.
POLITICS IS A WORRY
As the U.S. gears up for a presidential election in eight months, Dimon said the campaign would be a "circus" and too close to call.
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He acknowledged fears that Trump's second term could be more radical than the first and said he hoped the presidential hopeful's foreign policy rhetoric would be more thoughtful.
"The whole thing is going to be nervewracking," he said.
"I hope Trump is a much more thoughtful, rational speaker when he talks about foreign policy and how he wants to handle that." Dimon has previously warned that geopolitical tensions, including the war in Ukraine and conflict in Gaza, could weigh on global growth, and reiterated that theme on Tuesday.