JPMorgan Chase & Co. Chief Executive Jamie Dimon (Jamie Dimon) warned on Wednesday (8th) against prematurely declaring a victory over inflation, once the price rise finally becomes “sticky”, then the Fed may raise interest rates above 5%.
Before Dimon issued the warning, Fed officials had repeatedly indicated that further interest rate hikes were possible, although the January employment report was much better than expected, but so far no officials have suggested that this will prompt them to be more aggressive in monetary policy.
With economic data looking good this month, it makes perfect sense for the Fed to raise rates to 5 percent and stay there for a while longer, Dimon said.
If inflation falls to 3.5% or 4% and stays there, eventually the Fed may have to raise rates above 5%, which could affect both short-term and long-term rates, he said.
The Fed’s preferred measure of inflation had fallen to 5 percent in December from a peak of near 7 percent in June, a figure that was still well above its 2 percent target but also suggested that inflation was on the rise. steady decline.
However, after the release of the strong employment report, many analysts changed their views. The term “transient” used by the Federal Reserve to describe the inflation phenomenon in the past, if used to describe the performance of slowing inflation, is also May be “temporary”.
JPMorgan strategists led by Marko Kolanovic published a report this week titled “Temporary Deflation? “The research report pointed out that companies are faced with the difficult choice of laying off employees or sitting on the sidelines of profitability deterioration, and are currently “on the road to deterioration of profitability, which will eventually lead to layoffs.”
