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JPMorgan CEO Jamie Dimon: Potential For Zero Rates 'Obviously' A Concern

Jayson Derrick

JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon downplayed the likelihood of interest rates hitting zero, but the bank executive is taking steps to prepare for it, CNBC reported Tuesday. 

What Happened

Dimon said Tuesday at a conference in New York he doesn't believe the U.S. will join other countries worldwide with negative or zero interest rates, according to CNBC. But the bank executive is "thinking about how to be prepared" if this occurs and said it will "obviously" be a problem.

Some businesses would see no impact from zero rates, although there are others that would see their margins diminish — and there is "very little" that can be done in that case, CNBC quoted Dimon as saying.

The 10-year yield dipped as low as 1.44% in August and moved higher to 1.69% Tuesday. In contrast, benchmark bonds in developed economies like Germany come with a negative yield, CNBC said. 

Why It's Important

Even a veteran bank executive like Dimon was caught by surprise with the Federal Reserve's move to lower interest rates, Fox Business reported.

Dimon said at the conference he believed rates would be "heading up, not down" in 2019.

Preparing for an era of zero rates in the U.S. is part of the "normal course" of risk management, the CEO said.

Some of the ways JPMorgan could protect itself in a future era of zero rates include focusing on simply "building the business," with "more deposit accounts," he said. 

JPMorgan shares were down 0.66% at $115.97 at the time of publication Wednesday. 

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Photo by Dustin Blitchok. 

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