JPMorgan CEO Jamie Dimon mentioned the US Federal Reserve could have a tough time reducing the rate of interest until inflation drops, and isn’t anxious about stablecoins posing a menace to the banking sector.
“If inflation doesn’t go away, it’s going to be exhausting for the Fed to chop extra,” Dimon, the top of the most important financial institution within the US, told CNBC-TV18 on Monday.
“Inflation appears just a little bit caught at 3%. Once more, I may give you some arguments why it’s going to go up, not down,” he mentioned, including he’s looking forward to “first rate progress” and a charge reduce as an alternative of the Fed reducing charges on account of a recession.
Market expects a number of charge cuts
Dimon’s expectation has thrown some chilly water available on the market’s expectation of a number of charge cuts, with some anticipating as much as 5 cuts over the following 12 months.
Rate of interest cuts have usually been a boon for crypto markets, as cheaper borrowing provides buyers confidence to guess on riskier belongings. The Fed cut rates by 25 foundation factors on Wednesday for the primary time in 2025, which spurred Bitcoin (BTC) to over $117,500 for the primary time in additional than a month.
CME FedWatch information shows the market is anticipating one other 25 foundation level reduce when the Fed meets in late October, and the identical once more when it meets in early December.
The Feds’ projections present a large disparity, however trace at two extra cuts to come back earlier than the tip of the yr, with one other presumably happening in 2026.
The most recent US inflation data launched on Sept. 11 confirmed inflation rose 0.4% in August, marking a 2.9% rise over the past 12 months, above the Fed’s goal inflation charge of two%.
Dimon “not notably anxious” about stablecoins
Dimon individually weighed in on stablecoins, which have develop into a key coverage subject for banks after Congress handed legal guidelines regulating the tokens in July.
Dimon mentioned he’s “not notably anxious about” stablecoins, however his financial institution and others within the sector “must be on high of it and perceive it.”
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“There’ll be individuals who wish to personal {dollars} by a stablecoin outdoors the US, from dangerous guys to good guys to sure nations the place you’re most likely higher off having {dollars} and never placing into the banking system,” he mentioned.
He reiterated that JPMorgan is involved in stablecoins and the banking sector is “ whether or not they need to have a consortium” to launch a token.
“I’m undecided central banks want to make use of it amongst themselves, so it’ll develop over time,” he mentioned.
Banking teams have urged Congress to tighten up the stablecoin legal guidelines, claiming loopholes permit stablecoin issuers and their associates to pay curiosity or yields on stablecoins, arguing that it may undercut financial institution accounts and destabilize the banking system.
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