JPMorgan Chase chief executive Jamie Dimon thinks the U.S. Federal Reserve could actually raise rates, contrary to popular belief.
Despite consensus expectations of a rate cut in the coming months, Dimon said in a speech in Ireland on Thursday that he thinks the market is underestimating the potential impact of inflation on the Fed’s policymaking, Reuters reports.
“I think the possibility of those higher rates (is) higher than anybody else…
The market is pricing a 20% chance. I would price in a 40-50% chance. I would put that as a cause for concern.”
Dimon says the US government’s tariffs, immigration policies and budget deficit could all have inflationary impacts.
Other voices in the financial sector have predicted the opposite for Fed policy. Goldman Sachs Research economists recently estimated there’s more than a 50% chance of the Fed cutting rates at the Federal Open Market Committee (FOMC) meeting in September, three months earlier than their previous prediction.
The Goldman economists predict 25-basis-point cuts in September, October, and December, and March and June of 2026.
The CME FedWatch Tool estimates there’s a 93.3% chance the Fed will maintain the target range for the federal funds rate at 4.25-4.5% at the FOMC meeting in July. The tool, which generates probabilities using the 30-day Fed Funds futures prices, estimates there’s a 59.7% chance the Fed will cut the rate by 25 basis points at the FOMC meeting in September.
FedWatch estimates a 0% chance of a rate hike this month or in September.
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