REUTERS/Brian Snyder
- JPMorgan Chase CEO Jamie Dimon suspects the Fed may not be done hiking rates, per Yahoo.
- On Wednesday, the Fed said it would hold federal funds at rates steady in the 5.25% to 5.5% range.
- Dimon said the Fed may still hike rates by 0.25 percentage point to 0.75 percentage point.
The US Federal Reserve just left interest rates unchanged for the second meeting in a row — but it may not be done yet with monetary tightening, said JPMorgan Chase CEO Jamie Dimon on Wednesday.
"I think they're right to pause here and see what happens," Dimon told Yahoo Finance Live just hours after the central bank's decision. But "I suspect that they may not be done," he added.
On Wednesday, the Fed said it would hold the federal funds rate steady in the 5.25% to 5.5% range. It paused interest-rate hikes in September as well, giving some relief to American borrowers.
After all, the Fed has already raised interest rates 11 times since early 2022 to tame soaring inflation, making the cost of borrowing for anything from mortgages to credit cards more expensive.
But Dimon told Yahoo there are still chances for the US monetary authority to raise benchmark interest rates by 0.25 percentage point to 0.75 percentage point.
"I just think there's a higher chance than probably other people think," he added.
The top executive's assessment of the Fed's next steps appears to be based on the inflation rate, which in September came in at 3.7% on an annual basis. Although higher than the Fed's inflation target of 2%, that was unchanged from August and far lower than the 40-year peak of 9.1% reached in mid-2022.
The US economy is in a strong position with third-quarter GDP growth coming in at a two-year high of 4.9%. America's unemployment rate also held steady in September and the country even added 336,000 jobs in the same month. Strong economic growth typically fuels inflation.
"I think there's a chance that inflation is just a little stickier than people think and their fiscal and monetary stimulus in the last several years is more than people think. Unemployment is very low," Dimon added.
Dimon acknowledged that JPMorgan is concerned about the high rates but is ready for long-term rates to stay elevated.
"We stress for it," he told Yahoo.