JPMorgan CEO Warns High Prices May Continue

The head of America’s biggest bank said the battle against inflation may not be over.

J.P. Morgan Chase CEO Jamie Dimon warned that the Federal Reserve could push interest rates above 5% if higher prices remain “sticky,” Reuters reported Thursday (Feb. 9).

Dimon argued that “people should take a deep breath on this one before they declare victory because a month’s number looked good,” per the report. “It’s perfectly reasonable for the Fed to go to 5% and wait a while.”

But if inflation drops to 3.5% or 4% and remains there, “you may have to go higher than 5%, and that could affect short rates, longer rates,” he told Reuters.

Dimon’s warning comes at a time when inflation has left more people living paycheck to paycheck than at any point since the pandemic.

“I was shocked to see the numbers when they came out,” Anuj Nayar, financial health officer at LendingClub, said in an interview with PYMNTS published Thursday.

The most recent figures, compiled by PYMNTS and LendingClub, show that more than half of high-income earners — those making more than $100,000 per year — live paycheck to paycheck.

“And the reason it’s happening is pretty simple. It’s inflation,” Nayar told PYMNTS.

The average American household, he said, has seen its monthly bills increase by $400 since last year. That $400 is taken off the top line of one’s paycheck, so to speak, and there’s less left to go around.

Unsurprisingly, consumers are scaling back. And as Nayar put it, there are some areas that are already being impacted. Drill down a bit and inflation is affecting the way people live daily life. Nayar pointed out, for example, that many consumers chose to drive rather than fly during the great snapback in holiday travel.

Meanwhile, Dimon told Reuters that his bank is still upbeat about his hiring plans, even as other Wall Street banks cut jobs.

J.P. Morgan announced plans to hire more than 500 bankers focused on small businesses through next year. That would increase the bank’s workforce targeting the segment by 20% from more than 2,300 currently, according to the report.

“We’re still opening branches and in general around the world, we are still hiring bankers, consumer bankers, small business bankers, middle market bankers, folks overseas … we have more clients to cover,” Dimon told Reuters.