JPMorgan CEO Flags Limited Room for Interest Rate Cuts
JPMorgan CEO Jamie Dimon warned that the US Federal Reserve may find it difficult to cut interest rates unless inflation subsides further. Speaking on CNBC-TV18, Dimon noted that inflation remains persistent, sticking at around 3%, which is above the central bank�s 2% target. He commented, �If inflation does not go away, it�s going to be hard for the Fed to cut more.�
Market Expectations Face Reality Check
Dimon's remarks challenge market forecasts, which have priced in up to five rate cuts over the next 12 months. Historically, rate cuts make borrowing cheaper and boost risk assets like cryptocurrencies. Following the Fed�s recent 25 basis point rate cut�the first of 2025�Bitcoin rose to over $117,500 for the first time in more than a month.
Current data from CME FedWatch indicates that the market expects another 25 basis point cut during the Fed�s late October meeting, with another possible in December. The Fed�s guidance suggests two more cuts by year�s end, and potentially more in 2026. Still, the latest US inflation report showed prices rose 0.4% in August, totaling a 2.9% increase year-over-year.
Dimon Downplays Stablecoin Threat to Banks
The JPMorgan chief also addressed increasing policy attention toward stablecoins, which US legislators regulated earlier this year. Dimon said he is �not particularly worried about� stablecoins undermining the banking sector but stressed that banks should closely monitor these digital assets. �There�ll be people who want to own dollars through a stablecoin outside the US, from bad guys to good guys to certain countries where you�re probably better off having dollars and not putting into the banking system,� Dimon said.
JPMorgan and industry peers are currently assessing whether to launch their own consortium-backed token. Dimon also remarked that central banks may not need to rely on the technology for interbank use, and future developments will determine stablecoin adoption.
Banking groups, meanwhile, are urging Congress to tighten stablecoin regulations, especially regarding interest or yield payments to stablecoin holders, warning such features could undermine traditional bank products.
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