JPMorgan Chase CEO (JPM) Jamie Dimon is one big Wall Street figure who isn’t that concerned about what the Federal Reserve does at the end of its policy meeting Wednesday.
Whether the central bank cuts its benchmark rate by a smaller 25 basis points or a bigger 50 basis points, “it’s not going to be earth-shattering,” the boss of the biggest US bank said Tuesday at a conference hosted by Georgetown University’s Psaros Center for Financial Markets and Policy. “It doesn’t mean that much.”
When the Fed lowers or raises rates, he added, “it’s a minor thing,” explaining that “underneath that, there’s a real economy.”
Jamie Dimon, CEO of JPMorgan Chase. (Tom Williams/CQ-Roll Call, Inc via Getty Images) (Tom Williams via Getty Images)
Dimon, though, did say he supports the Fed’s easing of monetary policy and the central bank’s chairman, Jerome Powell.
“I think they need to do it,” he said. “And I think that Jay Powell does do a great job.”
Advertisement
Dimon has been warning for some time that the US economy could be more vulnerable than some market observers think, having voiced concerns about a potential stagflationary environment where inflation remains elevated and some rates surge to 7% as the labor market weakens.
“I am not sure if the world is prepared for 7%,” he said at a conference in India a year ago.
As recently as August, he said he was still “a little bit skeptical” that the inflation rate would fall back to the Fed’s 2% target. He also said then that the odds of a recession still happening were better than the chance of a no recession.
The coming rate cuts, however, will have an effect on the bank.
Last week, JPMorgan COO Daniel Pinto alarmed investors when he said that the consensus view among analysts that the bank would earn $94 billion in 2025 was “a bit too optimistic” due partly to the effect of falling rates.
Advertisement
A view of the exterior of the JPMorgan corporate headquarters. REUTERS/Mike Segar/Files (Reuters / Reuters)
While admitting the bank’s financial projections for next year weren’t complete, Pinto said JPMorgan was guiding for expenses to run higher in light of inflation and some other investments while its biggest profit driver, net interest income, looked to be lower due to falling rates.
Net interest income measures the difference between what banks earn on their assets (loans and securities) and pay out on their deposits.
Read more: What a Fed rate cut would mean for bank accounts, CDs, loans, and credit cards
JPMorgan’s stock fell the most intraday since 2020 following Pinto’s comments. It was also down slightly on Wednesday.
Year to date, the stock is still up over 20%.
Advertisement
While speaking Tuesday, Dimon also did not hold back when blasting bank regulators over a new set of capital rules designed to protect lenders against future losses, even after a top Fed official last week scaled back a new version of those rules.
Big banks like JPMorgan and Bank of America (BAC) would now have to increase their capital levels by 9% in aggregate. That is down by half from the original plan from more than a year ago, which set the capital increase to around 19% for those institutions.
“It’s been going for 10 years. I would have got it done in six months. I find it unbelievable,” Dimon said.
Banking regulators testify before a Senate Banking, Housing, and Urban Affairs Committee hearing in the wake of recent bank failures, on Capitol Hill in Washington, U.S., May 18, 2023. REUTERS/Evelyn Hockstein (REUTERS / Reuters)
But big banks are still waiting until the Fed releases the full proposal, which is expected to feature hundreds of pages of revisions to the original 1,000-page document along with a quantitative impact assessment.
Advertisement
“I don’t care about relief. I want the work to be done properly. That’s it, an honest assessment, and even after that, I’d say 10% more capital would be fine with me,” Dimon added.
Read more about the long-awaited Fed interest rate cut:
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance
Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
Advertisement
Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
Advertisement
Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
