JPMorgan chief executive Jamie Dimon isn’t fretting over the Fed.
Speaking at a financial services conference on Friday, the banking chief said all the recent buzz about whether the Federal Reserve will soon begin to raise interest rates is “a lot of chatter about nothing.”
“I don’t want to add to that chatter. Let the Fed decide when to raise rates,” he said.
On Thursday, Federal Reserve Board decided to leave the federal funds rate unchanged at 0-0.25%.
This of course has a big implications for the banks, which issue loans that have interest rates based on the Fed’s.
Dimon said that if the Fed raised rates 100 basis points, his bank could make about $US100 billion more per year.
Bank of America Merrill Lynch CEO Brian Moynihan made similar comments on Thursday, saying his bank could earn up to $US400 billion more per year as rates begin to rise. He said that benefit would be seen “at the short end of the rate curve.”
Both CEOs noted that their banks are nonetheless well-positioned for continued growth in the current low-rate environment.
Still, Dimon said, “I think normalization a good thing — I prefer we just get on with it.”
“The one thing that I do worry about a little bit is Treasurys,” Dimon said. “Interest rates have been so low for so long,” adding that not only have many traders never seen interest rates rise, but many of their bosses have never experienced it either.
He said he would not be shocked to see trading in 10-year Treasurys become volatile.
But overall, he said, “It’s not a big deal. I’m not panicked over it.”
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