Jamie Dimon One-Ups Goldman: Says He Would Be “Surprised” With Just 4 Rate-Hikes
Fresh off his appearance at Monday morning’s JP Morgan Health Care Conference, JP Morgan CEO Jamie Dimon appeared on CNBC (opposite Bertha Coombs) for an early afternoon interview as the Nasdaq entered correction territory amid a broader market rout.
As often happens on the rare occasion when stock markets are red, the producers at CNBC, who are paid by advertisers who all have an interest in pumping the market, typically panic and make desperate calls to powerful people who can help restore “confidence” in the market.
More often than not, it seems, their first call is to JPM CEO Jamie Dimon, the most trusted (by the people who participate in financial markets) megabank CEO on Wall Street.
And today, he had a convenient excuse, appearing to purportedly pitch a new health initiative in connection with the firm’s health-care conference.
Coombs led with the most important stuff first, asking Dimon directly about Goldman’s call for four rate hikes in 2022 (which we said earlier has no chance of happening), and whether he thinks the Fed can still engineer a “soft landing.”
CNBC’s Jim Cramer quipped in response that Dimon was “taking the over” on the number of rate hikes this year.
Dimon—best growth! 5 hikes.. Dimon taking the over…
— Jim Cramer (@jimcramer) January 10, 2022
Dimon’s rate call came with a notable caveat: Dimon said he does expect the Fed can “thread the needle” and stave off a recessionary catastrophe. So don’t panic, people.
At the same time, Dimon also said that he wouldn’t be surprised if there aren’t more than for hikes, one-upping Goldman with a seemingly hawkish pivot, while also speaking out the other side of his mount about the strength of the consumer and the business environment.
“They can engineer a slowdown we can see inflation coming down but if we’re lucky he fed will slow things down and we’ll have a soft landing. It’s like threading the needle…I’d be surprised if we saw just four rate hikes.”
Dimon added that “four increases of 25 basis points is a very little amount, and very easy for the economy to absorb.”
Still, he wouldn’t be surprised to see more market volatility.
And there you have it – some more “straight talk” from Wall Street’s favorite CEO.
Clearly, JPM Head of Global Strategy Marko Kolanovic got “the tap” from the higher-ups earlier as he advised the bank’s clients earlier today that the selloff is already overdone.
Is it really possible the Fed might shoehorn five rate hikes this year? We pointed out earlier why economists at Goldman and Deutsche Bank might be getting ahead of themselves. As Citi’s Matt King pointed out, the market is much more late-cycle than the economy, meaning that actually yes, it will likely be quite sensitive to four or five 25 basis point rate hikes. Our explanation on that is available to pro subs in the usual place.
In reality, when the market craters after just one or two hikes, the Fed will undoubtedly step in and bail the market out once again by dropping rates back to zero…yet again, as ZIRP proves harder to shake than a serious dope habit.
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