Jamie Dimon isn't losing sleep over the stock market's biggest fear

  • The stock market hit a rough patch last week, when fears around faster-than-expected wage growth triggered a correction.
  • Inflation in January rose by more than economists forecast, a report from the Bureau of Labour Statistics showed on Wednesday.
  • Jamie Dimon, the chief executive of JPMorgan Chase, told Business Insider that while higher-than-expected wage growth and central-bank tightening were legitimate concerns, job growth was more important.
  • “If you had inflation and growth declining, then you should be much more worried,” he said. “But it’s not about the stock market. It’s about the people and their jobs.”
  • We also talked to Dimon about the bank’s $US20 billion investment in the US, the economy, and why he won’t run for office. You can read the full Q&A here.

Jamie Dimon does not seem worried about the stock market correction.

Business Insider caught up with the JPMorgan Chase CEO on Tuesday in the South Bronx, where the bank was announcing the expansion of its Entrepreneurs of Colour Fund. He talked about the fund, JPMorgan’s big bet on brick-and-mortar bank branches, and wages. The bank in January announced it was raising wages for 22,000 US employees who work in its branches and customer-service centres, as part of a $US20 billion investment in its US business.

That decision and many others like it have led to fears of higher-than-expected wage growth in a tightening labour market. Those fears helped trigger a sharp correction in the US stock market. On Wednesday, a report from the Bureau of Labour Statistics showed that inflation in January by rose more than economists had forecast, with stocks again taking a hit.

Dimon told Business Insider on Tuesday that while inflation was a legitimate concern, job growth was more important.

“It’s not about the stock market, he said. “It’s about the people and their jobs.”

Below is a lightly edited transcript of the conversation.

Matt Turner: The market correction we had last week was at least triggered by fears around inflation and wage growth that was higher than expected. How much of a concern should that be going forward?

Jamie Dimon: If you’d asked me in May, I would have told you that sometime down the road, if we’re going a little bit faster than you think, people will be afraid of wages, inflation, and it’s kind of so predictable. The important thing is the higher growth.

Now you’re climbing the wall of worry. OK, we have higher growth, wages may be going up. We all wanted it, but the flip side of that is that interest rates may go up and inflation may be a little higher than people think.

I think the job growth, the employment growth is more important than that. And of course, the markets always readjust to changing expectations, and now the expectations change. You also have central banks reversing the purchase of bonds. And those are legitimate concerns, but again, if you have jobs and wages, that’s more important.

Turner: And in terms of the speed and severity of the correction last week, was that a concern to you?

Dimon: No.

Turner: Do you think that’s just perfectly normal?

Dimon: I know it will shock the public. I spend almost no time worried about something like that. We serve clients. Markets fluctuate. Markets will always fluctuate. Markets have always fluctuated. To me, again, the important thing is the economy. If you had inflation and growth declining, then you should be much more worried. But it’s not about the stock market. It’s about the people and their jobs.

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