JPMorgan CEO Cautions Against Early Fed Celebrations Amid Inflation Fears
The recently released US Consumer Price Index has elicited an upswing in the stock market, whereas long-term US Treasury bonds sustained a decline from their peak levels in sixteen years.
JPMorgan Chase's CEO Jamie Dimon told news sources that the Federal Reserve should persist in its efforts to curb inflation on Tuesday.
Dimon commented on the market's possible overreaction to the Consumer Price Index report, which indicated a softer-than-expected year-on-year increase of 3.2 percent in October. This report triggered a surge in major stock indices, with the S&P 500 and the Nasdaq Composite hitting two percent, while 10-year US Treasury bond yields continued declining from the peak levels seen in 16 years.
Highlighting the potential persistency of inflation, the JPMorgan Chase CEO pointed out its enduring nature despite the lower-than-expected figures. Since March 2022, the Fed has raised interest rates from nearly zero to around 5.5 percent to temper soaring prices, inching closer to its 2 percent inflation target.
However, Dimon, who previously predicted that interest rates might peak at seven percent, recommended a continued cautious approach. Given the significant increases already implemented, he acknowledged the Fed's current pause in rate hikes.
Nevertheless, Dimon emphasized the likelihood of needing further measures as part of a risk management strategy, considering ongoing economic changes and the impact of quantitative tightening.
Similarly, while speaking to media outlets, Citadel founder Ken Griffin expressed concerns about enduring inflation. Griffin underscored the Federal Reserve's need to stay committed to controlling inflation to maintain its credibility.