JPMorgan CEO Jamie Dimon stated the US Federal Reserve could have a tough time reducing the rate of interest except inflation drops, and isn’t anxious 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 most important financial institution within the US, instructed CNBC-TV18 on Monday.
“Inflation appears a bit of bit caught at 3%. Once more, I may give you some arguments why it’s going to go up, not down,” he stated, including he’s eager for “first rate development” and a fee lower as a substitute of the Fed reducing charges attributable to a recession.
Market expects a number of fee cuts
Dimon’s expectation has thrown some chilly water available on the market’s expectation of a number of fee cuts, with some anticipating as much as 5 cuts over the following 12 months.
Rate of interest cuts have sometimes been a boon for crypto markets, as cheaper borrowing provides buyers confidence to wager on riskier property. The Fed lower 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 exhibits the market is anticipating one other 25 foundation level lower 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 come back earlier than the tip of the yr, with one other probably 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 during the last 12 months, above the Fed’s goal inflation fee of two%.
Dimon “not significantly anxious” about stablecoins
Dimon individually weighed in on stablecoins, which have turn into a key coverage challenge for banks after Congress handed legal guidelines regulating the tokens in July.
Dimon stated he’s “not significantly anxious about” stablecoins, however his financial institution and others within the sector “ought to be on high of it and perceive it.”
Associated: ‘Uptober’ rally questioned as crypto markets flip crimson 9 days out
“There’ll be individuals who need to personal {dollars} by means of a stablecoin exterior 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 may undercut financial institution accounts and destabilize the banking system.
Commerce Secrets and techniques: Bitcoin to see ‘yet another massive thrust’ to $150K, ETH strain builds
