MIAMI, Feb 8 (Reuters) – Jamie Dimon, chief executive of JPMorgan Chase & Co. (JPM.N), told Reuters on Wednesday that the US economy remains in good shape but warned that a ” “Stuck” inflation could prompt the Federal Reserve to raise interest rates above 5%.
In a lengthy interview with Reuters, Dimon warned of the negative impact of stricter credit card fee regulation and said he plans to visit China as it is important to maintain ties there.
Speaking of inflation, Dimon said, “People should take a deep breath on this one before declaring victory because the month number looked good.”
“It’s perfectly reasonable for the Fed to go to 5% and wait a while,” Dimon said.
But if inflation goes down to 3.5% or 4% and stays there, “you may need to go above 5% and that could impact short and longer interest rates.”
His comments came after Federal Reserve officials said earlier Wednesday that more rate hikes are on the cards as the Federal Reserve accelerates its efforts to cool inflation.
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From a peak of nearly 7% in June, the Fed’s preferred inflation measure was 5% in December – well above its 2% target but on a steady downward trend.
Dimon said a US debt default — a prospect the country faces if its debt ceiling is not raised — would be potentially “catastrophic.”
“We can’t have a default,” Dimon said. It could do lasting damage to America and “destroy its future,” he said.
President Joe Biden, in his address to a joint session of Congress on Tuesday, urged Republicans to raise the $31.4 trillion debt ceiling, which must be raised in the coming months to avoid a default.
Reporting by Lananh Nguyen; writing by Saeed Azhar; Editing by Deepa Babington
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