Placeholder canvas
HomeFinance NewsJPMorgan CEO Warns World May Not Be Prepared for 7% U.S. Interest...

JPMorgan CEO Warns World May Not Be Prepared for 7% U.S. Interest Rate

Published on

Jamie Dimon, CEO of JPMorgan, has warned that the global economy may not be prepared for a worst-case scenario in which US interest rates rise to as high as 7% accompanied by stagflation. The US Federal Reserve has already increased benchmark borrowing costs by 525 basis points since March 2022 in an effort to control inflation, which partially contributed to the cryptocurrency market crash last year. Dimon suggests that if the Fed continues to raise rates to combat inflation, it could have more damaging effects on the global economy. He expresses concern that the world may not be ready for interest rates at 7%.

If interest rates were to reach 7% alongside stagflation, it would increase the risk of a recession in the US economy. This would have negative implications for risk assets such as technology stocks and cryptocurrencies. Additionally, the ongoing tightening measures could lead to US Treasury yields reaching multi-decade highs, making bonds more attractive and potentially draining capital from riskier investments. Dimon’s comments go against the popular belief that the Fed’s tightening cycle has already peaked, as the central bank has stated its intention to keep borrowing costs higher for a longer duration.

In summary, Jamie Dimon has expressed concern about the global economy’s readiness for the potential scenario of US interest rates rising to 7% alongside stagflation. He believes that the ongoing tightening measures by the US Federal Reserve could have more damaging effects on the global economy and may catch some investors off-guard. The potential risks include a recession in the US economy and a drain of capital from risky investments towards more attractive bonds. Dimon’s comments contradict the belief that the Fed’s tightening cycle has already reached its peak.

Source link

Latest articles

Potential Benefits for Consumers in Capital One and Discover Merger Deal.

Capital One's recent announcement to acquire Discover Financial in a deal worth over $35...

Mixed stocks post breakout rally show fluctuation.

Walmart investors are eagerly anticipating a stock split scheduled for later today. This will...

8 dead in head-on crash in Madera County, California, says Highway Patrol.

Eight people tragically lost their lives in a devastating crash in Madera County, California....

Spotify HiFi and my subscription: both missing for three years.

In a surprising turn of events, Spotify is still teasing its long-awaited HiFi lossless...

More like this

Potential Benefits for Consumers in Capital One and Discover Merger Deal.

Capital One's recent announcement to acquire Discover Financial in a deal worth over $35...

Mixed stocks post breakout rally show fluctuation.

Walmart investors are eagerly anticipating a stock split scheduled for later today. This will...

8 dead in head-on crash in Madera County, California, says Highway Patrol.

Eight people tragically lost their lives in a devastating crash in Madera County, California....