JPMorgan Chase (JPM) CEO Jamie Dimon said he doesn’t think the Federal Reserve should begin lowering interest rates by June and should instead wait for more clarity.
"If I were them, I would wait," Dimon said at the Australian Financial Review business summit via livestream in Sydney.
The suggestion from the boss of the nation's largest bank comes as the central bank prepares to meet next week to decide on the direction of rates, which are currently at a 22-year high following an aggressive campaign to lower inflation.
Investors are currently betting that the Fed will hold steady in March and May before making its first cut in June, adjusting their expectations following cautious commentary from Fed Chair Jerome Powell and other Fed officials.
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
Powell said last week that the Fed is "not far" from the confidence it needs to cut rates, while some of his colleagues have suggested it could happen "later this year" or during the summer.
"You can always cut it quickly and dramatically," Dimon said. "Their credibility is a little bit at stake here. I would even wait past June and let it all sort it out."
The JPMorgan chief has been warning for some time now that inflation may prove to be stickier than expected and that rates could remain higher for longer.
Last November he told Yahoo Finance that it was possible the Fed could still raise rates further, warning businesses should be prepared for such a worst-case scenario.
"I suspect that they may not be done," he said during that November interview.
JPMorgan's research team is more bearish than almost every other major bank in its projections for the stock market's trajectory for 2024. The bank's strategist expects the S&P to close the year at 4,200, which would mean a nearly 18% drop from the index's current price of over 5,100.
The US stock market has rallied since November, with the major index S&P 500 rising over 24% in that time.
Dimon said Monday he wouldn't take a recession "off the table" and pointed to the prices of bitcoin (BTC-USD), gold, and certain credit securities all as signs of bubbles forming in financial markets and more reason for the Fed to hold off.
On Monday, bitcoin touched a new all-time high of more than $72,000.
"I think that the amount of fiscal stimulus in the world has been extraordinary. The amount of [central bank] quantitative easing has been extraordinary. It’s kind of like a drug passing through the system," Dimon said.
"Fiscal spending has a multiplier effect, meaning if I give you money, you spend that money. Companies are making profits from the same ‘heroin’ driving up stock prices and earnings," he added.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
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