JPMorgan CEO Dimon Says Fed 'Is Doing the Right Thing' to Wait and See

Bloomberg

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00:00Given the higher yield environment, which you say it's not, but it is still higher than what it was before.

00:08Will it go higher?

00:09Will it go higher? And also, will it force the Fed's hand?

00:13Yes. I mean, there's always a notion that somehow the Fed is omnipotent and can do whatever it wants.

00:19And they do set short-term rates, but they also have to follow the facts.

00:23So they raised rates because inflation went up.

00:26You know, and they can't control it. Even today, you know, trillions of dollars, these bonds are sold every day.

00:32That's done by investors around the world. They cannot control all of that.

00:36You know, foreigners own $35 trillion of U.S. financial tradable assets.

00:41And so, you know, they have to react to reality, which they, that's not a criticism.

00:45And they say they're data dependent, but they have to wait and see exactly what happens and then do the appropriate thing.

00:52But the thing is, their reality is different from the reality you have in mind.

00:56If you take a look at what Neil Kashkari said, he said the U.S. economy is on solid footing.

01:02And some other Fed officials have said that in terms of Fed policy, it is in a very sweet spot.

01:08So their reality is quite different.

01:11I think, I don't agree we're in a sweet spot, okay?

01:15And I think you have to separate two things.

01:18The economy has been doing well.

01:21All the facts, you know, we have been, effectively been in a soft landing.

01:25That does not tell you what the future is going to be.

01:28To worry about the future, if you look at all the things that affect the future, kind of work your way back to the current day.

01:33And I've already mentioned, huge deficits.

01:35We haven't finished quantitative tightening yet.

01:38There are huge geopolitical issues.

01:40There are these inflationary factors out there.

01:42And they have to react to all of that.

01:44So I think they're doing the right thing to kind of wait and see before they decide.

01:48One final question, and I promise this is the final question.

01:51Okay.

01:51The dollar, right?

01:53Usually when you have a high-yield environment, the dollar gets a boost.

01:56But it's the other way around.

01:57How are you reading into dollar weakness?

01:59Yeah.

01:59Well, like I said, foreigners own $35 trillion of U.S. securities.

02:03The United States still is the most prosperous, innovative nation on the planet.

02:07That's not going to change.

02:08But I think it might be reasonable, people looking at it.

02:11And also, asset prices are high.

02:12So if you go around the world, you look at stock prices in the U.S. are up here.

02:16You know, P.E. ratios or other parts of the world are much lower.

02:19So people legitimately say, well, maybe a little bit less dollar assets and a little bit more of that.

02:23So you may see some kind of adjustment.

02:24I think at the end of the day, the important thing for America is that we do the right things to grow our own economy.

02:29And that includes affordable housing and for business and innovation and growth and R&D and all those things.

02:34That's the important thing.

02:35You know, I don't worry that much about short-term fluctuations in the dollar.

02:39But I do understand that people might be reducing dollar assets today a little bit.

02:42Coming from a patriot.

02:43Jimmy Diamond, thank you so much for joining us.

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