Jamie Dimon Says Fed Independence ‘Absolutely Critical,’ Warns Against Political Interference

JPMorgan Chase (JPM) CEO Jamie Dimon emphasized the importance of the Federal Reserve’s independence during the bank’s second-quarter earnings call, warning that political interference with the central bank could have “adverse consequences.”

Dimon’s remarks follow persistent criticism of the Fed by U.S. President Donald Trump, who has publicly pressured the central bank and its chairman, Jerome Powell, to bring down interest rates. Dimon added that tampering with the Fed’s autonomy could disrupt economic stability, calling such interference risky.

“Well, from what I’ve seen the president has said he [is] not going to try to remove Jay Powell,” Dimon said during the bank’s second quarter (Q2) earnings call. “The independence of the Fed is absolutely critical, and not just for the current Fed chairman, whom I respect, Jay Powell, but for the next Fed chairman.” 

JPMorgan’s stock edged 0.6% lower in pre-market trade. However, retail sentiment on Stocktwits moved higher to ‘extremely bullish’ territory, up from ‘bullish’ a week ago.

The bank reported earnings per share (EPS) of $5.24 in Q2, beating an expected earnings per share (EPS) of $4.48, according to Stocktwits data. JPMorgan’s revenue during the quarter came in at $45.68 billion, higher than the estimated $43.81 billion, but down nearly 10% year-on-year.

Discussing market conditions, Dimon noted that asset prices reflect expectations for a “soft landing” in the economy. “Stocks are fairly well priced, likely in the top 10 to 15 percent of historical valuations,” he said. “Credit spreads are also a little unnaturally low considering the risks out there.”

On the topic of private credit, Dimon dismissed speculation that JPMorgan would acquire a firm to gain exposure to the sector. “It’s not high on my list because we can do it ourselves,” he said. “You’re buying people and compensation plans. We may have already seen peak private credit.”

Still, he left the door open to potential opportunities. “If it were the right people at the right price, sure, we’d look at it. Our bankers might bring us something tomorrow that’s a natural fit.”

Dimon also said the finalization of President Trump’s tax bill and the potential deregulation are two positives for the U.S. economic outlook.

Read also: Jamie Dimon Warns Of 'Significant Risks' Even As JPMorgan's Q2 Results Smash Wall Street Estimates

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