JP Morgan Dimon: "US Interest Rates, Probability of Increase or Decrease is 50-50"

[Financial News]  


Jamie Dimon, Chairman and CEO of JP Morgan Chase, the largest bank in the United States, warned on the 10th (local time) that the possibility of a US interest rate hike is much higher than the market expects.

Dimon, who has significant influence on Wall Street, expressed concern that the market has become 'numb' to President Donald Trump's tariffs, saying this is a dangerous sign.

President Trump, starting with sending a trade letter on the 7th imposing 25% mutual tariffs on South Korea and Japan, announced a 50% tariff on Brazil on the 9th, and a 35% tariff on Canada on the 10th.

Additionally, he announced an expansion of item-specific tariffs, imposing a 50% tariff on copper starting next month and a 200% tariff on pharmaceuticals next year.

There are already concerns that if Trump, who has imposed large-scale tariffs on steel and aluminum, applies copper tariffs, the US industry could suffer severe damage and inflation could soar.

The tech-heavy Nasdaq, although it hit a record high for three consecutive days until that day, turned weak amid these concerns, while the Standard & Poor's (S&P) 500 of the New York Stock Exchange, which had hit a record high the previous day, turned weak.

Dimon criticized the current market for being overly complacent and not properly recognizing the situation.

He said this at an event hosted by the Irish Foreign Ministry.

Dimon warned that investors are reacting indifferently to Trump's tariff news, saying it could come back like a boomerang and shock investors.

Dimon pointed out that the possibility of the Fed raising interest rates is significantly higher than the market currently expects, as tariffs could reignite inflation and become a serious problem.

He said the market assesses the likelihood of a rate hike at around 20%, but he sees the probability as reaching 40-50%.

Dimon added, "I would include this as a risk factor."

He also warned last month that the US economy is at high risk of turning downward within the next few months, and that real indicators will soon flash warning lights.

Meanwhile, in his speech that day, Dimon urged Europe to lower trade barriers, complete capital market and banking integration, and simplify regulations, taxes, and legislative procedures, as it is falling behind in competition with the US and Asia.

dympna@fnnews.com Song Kyung-jae Reporter