JPMorgan CEO Jamie Dimon Thinks Sticky Inflation May Keep Fed From Delivering More Rate Cuts: ‘It’s Going To Be Hard…’

JPMorgan Chairman and CEO Jamie Dimon said on Tuesday that it might be tough for the Federal Reserve to follow up on its rate cuts even as the market has already baked in more reductions at the remaining two meetings of the year.

While speaking to CNBC TV18 on the sidelines of JPMorgan’s Annual India Investor Conference held in Mumbai, the JPMorgan head honcho said, “If inflation does not go away, it's going to be hard for the Fed to cut more…..inflation seems a little bit stuck in 3%.”

Dimon thinks inflation’s trajectory is likely to be up and not down, while he does not favor rate cuts necessitated by a recession. “Obviously, if we go into a recession, and that's why rates are being cut, that's not good either,” he said, adding that he hoped for decent growth and the rates to come down a bit.

The CME FedWatch Tool, which is constructed based on expectations of futures traders, puts the odds of a quarter-point cut at each of the October and December meetings at about 90% and 75%, respectively.

The equity market has been rallying hard on hopes that the central bank will hand out more cuts. The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) have added 14.8% and 18.1%, respectively, for the year.

On Stocktwits, retail sentiment toward the SPY ETF was ‘bullish’ (71/100) by late Monday, while that toward the QQQ ETF was ‘neutral’ (41/100). The message volumes on both streams were ‘high.’

The JPMorgan CEO also weighed in on the Fed’s independence. “President [Donald] Trump has come out and said, ‘I believe in an independent Fed.’ He’s quite strong about his opinions, but being independent is an important thing.”

Dimon, however, pointed out that the central bank is not really independent in matters such as supervision and regulation. “Hopefully, we'll pick a good Fed chair, he said, adding that “Some of the names I think are quite good.”

Powell’s term as chairman expires in May, and the Trump administration signaled that his term wouldn’t be extended following their dissatisfaction over his handling of monetary policy.

On Monday, Treasury Secretary Scott Bessent said he plans to complete interviewing 10 of the 11 candidates to replace Powell by the end of next week, before shortlisting two or three and recommending them to the president.

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