BackTime for Fed to raise interest rates, says JPMorgan Chase CEO
Jamie Dimon, CEO and chairman of the biggest US bank JPMorgan Chase, isn't a disinterested party because lenders make more money when interest rates rise
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New York: JPMorgan Chase & Co. chief executive officer Jamie Dimon said the Federal Reserve should increase interest rates—sooner, rather than later.
“Let’s just raise rates," Dimon said on Monday during a wide-ranging discussion at the Economic Club of Washington. “The Fed has to maintain credibility. I think it’s time to raise rates. Normality is a good thing, not a bad thing. The return to normal is a good thing."
Fed policy makers will gather in Washington on 21-21 September, and recent comments from voting members have sent mixed signals about whether they’ll lift rates or wait at least until the December meeting.
Speaking on Monday in Chicago, Fed governor Lael Brainard said “the case to tighten policy pre-emptively is less compelling" in an environment where declining unemployment has been slow to spur faster inflation.
Boston Fed president Eric Rosengren, a voting member this year on the Federal Open Market Committee, argued on Friday there was a reasonable case for gradual tightening.
Dimon, CEO and chairman of the biggest US bank, isn’t a disinterested party. Banks typically make more money when interest rates rise as the gap widens between how much they charge borrowers and pay depositors. The shares of banks have climbed this year on days when speculation rises that the Fed is closer to increasing rates.
“I’d go sooner rather than later, but I’ll leave the exact timing up to them," Dimon said.
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In a conversation that touched on topics from regulation to US immigration policy to the highlights of his more than three decades in finance, Dimon lambasted the lack of educational opportunities for inner-city residents as a “disgrace". When asked if he would ever enter politics, Dimon, 60, said he would “love to be president" but the path is too difficult.
It’s likely some of the regulations enacted under the Dodd-Frank Act will be improved in coming years, Dimon said, adding that he isn’t in favour of throwing it out entirely. When asked about cyber-security pressures, the CEO said JPMorgan was a like a “mini-police state" in tracking employee behaviour, and that he fires staffers every week for violating policies. JPMorgan spends $600 million annually on cyber security, a figure that could rise to $1 billion in a few years, he said.
Dimon, who was treated for throat cancer in 2014, said he’s in good health and will probably be CEO for another five years. Bloomberg
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