JPMorgan CEO Jamie Dimon sees ‘a lot of underlying inflation,’ rates at 6% in a recession

NEW YORK (Jan 19) JPMorgan Chase & Co. CEO Jamie Dimon said Thursday he thinks the U.S. Federal Reserve may need to hike interest rates beyond the 5.1% terminal rate that it set in December.

Speaking on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland, Dimon said, “There’s a lot of underlying inflation, which won’t go away quick” and that more interest rate hikes may be needed.

“I actually think rates are probably going to go higher than 5%,” Dimon said, as reported by CNBC.

Dimon predicted interest rates could rise to 6% if a mild recession kicks in. JPMorgan JPM, -3.00% economists currently expect a minor recession in late 2023 or early 2024.

“I know there are going to be recessions, ups and downs,” Dimon said. “I really don’t spend that much time worrying about it. I do worry that for public policy that damages American growth,” Dimon said.

An economic slowdown in China and lower oil prices have helped keep inflation at bay, but these dynamics remain temporary, he said.

St. Louis Fed President James Bullard said this week The Fed should move as rapidly as it can to get its policy rate over 5% and then it can react to the data, he said.

In December, Fed officials projected getting the benchmark rates up to a range of 5%-5.25% this year.

MarketWatch