Jamie Dimon Warns Markets Against Underestimating Interest Rates Hikes

JPMorgan’s CEO is worried Wall Street is underestimating the potential for higher interest rates.

Such a thing is a “cause for concern,” said Jamie Dimon, whose comments Thursday (July 10) at an event hosted by Ireland’s Department of Foreign Affairs were reported by Reuters.

As that report noted, The Federal Reserve voted last month to leave rates unchanged. Jerome Powell, the central bank’s chair, said he expected “meaningful” inflation ahead as consumers paid more for goods in the wake of higher tariffs.

President Donald Trump has demanded immediate, sharp interest rate cuts, and called for Powell to step down.

According to Reuters, Dimon said his view of the possibility of a further rate increase was “higher than anybody else.”

“The market is pricing a 20% chance. I would price in a 40-50% chance,” he said. “I would put that as a cause for concern.”

He added he was basing these figures on price pressures, pointing to the tariffs, U.S. immigration policies and its budget deficit. Dimon added that the reconfiguring of global trade and demographics were also “kind of inflationary.”

Meanwhile, the report added, Dimon — who runs the largest bank in the U.S. — warned that Wall Street was being too blasé in the aftermath of White House tariff policies and trade uncertainty.

“Unfortunately I think there is complacency in markets, and (they are) a little desensitized,” he said at the event.

Also Thursday, a new report from Wells Fargo warned of a possible economic slowdown, with job creation slowing and inflation expected to increase.

The bank said job creation has been affected by stagnation in small businesses’ hiring efforts, while inflation will be fueled by companies raising prices once they’ve sold off the inventory they amassed before the new tariffs were instituted.

Both these stories came as new U.S. employment data showed that companies have been cautious about adding more workers even as they hold on to their current staffers.

The latest figures from the Department of Labor showed that while the number of Americans filing for unemployment fell to the lowest level in seven weeks, the insured unemployment number climbed to the highest level seen in almost four years.

The Bureau of Labor Statistics reported last week that employment rose in June at about the same rate it’s been growing across the last year, with gains in state government and health care, declines in federal government and little change in other major sectors.