Jamie Dimon Says Fed Should Pause Rate Hikes: History Says the Stock Market Will Do This Next
The Federal Reserve has quickly tightened credit conditions over the last 15 months in an effort to reduce inflation. Officials have raised the federal funds rate -- a benchmark interest rate that impacts other rates across the economy, like bank loans and credit cards -- by five percentage points since March 2022, marking the most aggressive series of rate hikes since the early 1980s.
The rationale behind those rate hikes is straightforward: Demand for goods and services drops as the cost of borrowing rises, and that ultimately causes inflation to fall. Indeed, inflation has now decelerated for 10 consecutive months. But tampering with interest rates is not an exact science, and some experts believe the Fed has tightened too aggressively. In fact, analysts at JPMorgan Chase believe a recession is probable before the end of the year.
Last week, JPMorgan Chase CEO Jamie Dimon sat down with Bloomberg to discuss the economy. He candidly told the Fed to "take a pause" on rate hikes, but he also said people should be prepared for rates to go a little higher. Either way, Dimon believes the Fed is nearing the end of its rate hike cycle, and that is good news for investors.
Source Fool.com
JPMorgan Chase & Co. Aktie
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