JPMorgan CEO Jamie Dimon stated the US Federal Reserve can have a tough time reducing the rate of interest except inflation drops, and isn’t apprehensive about stablecoins posing a risk to the banking sector.
“If inflation doesn’t go away, it’s going to be laborious for the Fed to chop extra,” Dimon, the top of the biggest financial institution within the US, instructed CNBC-TV18 on Monday.
“Inflation appears just a little bit caught at 3%. Again, I can provide you some arguments why it’s going to go up, not down,” he stated, including he’s eager for “first rate development” 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 in the marketplace’s expectation of a number of charge cuts, with some anticipating as much as 5 cuts over the following 12 months.
Interest charge cuts have sometimes been a boon for crypto markets, as cheaper borrowing offers buyers confidence to wager on riskier belongings. The Fed reduce charges 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 reveals 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 return earlier than the top of the 12 months, with one other presumably going down in 2026.
The newest US inflation information 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 significantly apprehensive” about stablecoins
Dimon individually weighed in on stablecoins, which have grow to be a key coverage challenge for banks after Congress handed legal guidelines regulating the tokens in July.
Dimon stated he’s “not significantly apprehensive about” stablecoins, however his financial institution and others within the sector “must be on prime 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 international locations the place you’re most likely higher off having {dollars} and never placing into the banking system,” he stated.
He reiterated that JPMorgan is concerned in stablecoins and the banking sector is “taking a look at 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 stated.
Banking teams have urged Congress to tighten up the stablecoin legal guidelines, claiming loopholes enable stablecoin issuers and their associates to pay curiosity or yields on stablecoins, arguing that it might undercut financial institution accounts and destabilize the banking system.
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