JP Morgan CEO Dimon warns of possibility of Fed making a sharp move in 2022


Jamie Dimon, the chief executive officer (CEO) of JP Morgan Chase has cautioned investors about a sharp policy move by the Federal Reserve. He believes that such a move could happen next year although the efforts to remove concerns of inflation and interest rates by the central bank are still on.

In an interview aired on Tuesday, Dimon told CNBC-TV18 that the central bank might be forced to act quickly if inflation continues to rise over the next few months. He said that if inflation continued to go higher the central bank would have to “jam on the brakes” and “pull out liquidity.” He said that it was not a prediction but a possibility that it would happen “sometime next year.”

He also declared that the Fed could not always be “proactive” and there were sometimes when it had to be “reactive.”

Earlier, Fed Chairman Jamie Powell had indicated that  pandemic era monetary stimulus might be in the process of winding down by the end of 2021. Later on Wednesday, the Fed is expected to publish its eagerly awaited inflation and interest rates forecasts, which have been one of the focal points of its two-day policy meeting.

The Fed has been grappling with the issue of a somewhat runaway inflation. In July, the inflation rate was at a 13-year high of 5.4 percent. The latest data shows a slight decrease in consumer prices and is at 5.3 percent in the year to August.

The Fed chair has noted that the rise is inflation is transitory. However, the JP Morgan CEO believes that if the inflation rates continue to remain high till the end of the year, policy makers in the nation will have to accept that price rises are there to remain and corrective measures would have to be undertaken.

JP Morgan’s CEO Jamie Dimon believes that there’s a part of inflation that’s “transitory” and there’s a part that’s not and “that’s not a disaster.”


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