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.”
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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.
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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%.
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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.
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“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.
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Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Source: GfK
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
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“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Sourve: GfK
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
“Ships of the World, start your engines. Let the oil flow!” said Donald Trump on social media after he announced the signing of an interim peace deal with Iran on Sunday. Under the agreement – which Iran acknowledged included a 60-day negotiating period for a final deal – the president said that following retrieval of mines, there would be a “toll free opening” of the Strait of Hormuz.
But many of the finer details remain “unclear”, said The Guardian. There are questions over the “exact timing of the reopening of the maritime route, who will oversee safe passage and whether any conditions will be applied”.
Financial markets have welcomed the announcement, but further volatility could yet hit people’s pockets.
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Have oil prices changed?
The price of oil fell to about $83 (£62) per barrel following Sunday’s announcement, its “lowest since the early days of the war”. Then on Tuesday it dipped below $80. In February, before the first missiles struck Iran, each barrel cost around $73. The price peaked at around $120 at the height of the conflict.
Prices are expected to fall in the wake of a prolonged ceasefire, and there are “real grounds for optimism”, said Politico. Damage to oil-specific infrastructure has been “limited”, meaning it could take “as little as six weeks to resume outflows”.
“So that’s the energy crisis sorted, right?” Not so fast.” A combination of damage to wider infrastructure and the continued closure of the Strait of Hormuz has meant roughly 12 million fewer barrels of oil have been produced each day. And they “won’t magically reappear on the market even if the pact holds”.
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Will this continue?
The “first big test” of the deal will be whether shipping companies will have enough “confidence” to return the use of the strait to pre-war levels, said The New York Times. If successful, this will free the 250 tankers and 330 cargo ships trapped in the Gulf, according to the BBC, and transport oil around the world. Oil and gas producers in the Gulf nations would then need to re-establish “wells, refineries and other infrastructure”.
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Even if all of that were to materialise, European and Asian countries who have historically depended on oil from the region “will face a long wait”. Processing oil takes considerable time. “It is unlikely that the prices of gasoline, diesel and other fuels will return to pre-war levels anytime soon.”
What about inflation?
Despite air fares “surging” and fuel costs “tipping higher”, UK inflation remained at 2.8% in May, said The Independent. This was a “surprise” to economists, who had widely predicted a rise to 3% and “perhaps even beyond” due in part to the war in Iran.
Remaining at this level could imply that the “cost-of-living squeeze will not play out as badly as had been anticipated” earlier this year, even if the “Iran war sent energy costs spiralling”. However, prices are set to rise again later in 2026, leaving savers to make sure their investments are earning an interest rate “well above the rate of inflation”.
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What does this mean for consumers?
Food prices in the UK look to be rising more slowly. Should the Strait of Hormuz open freely, fertiliser, which has “soared in costs” and put pressure on farmers, could fall substantially, said the BBC. Jet fuel has already seen a “small fall in price”, with Northwest Europe jet fuel trading at $1,033 (£780) per tonne, compared with $831 pre-conflict and around $1,840 at its peak.
How will businesses be affected?
Beneath the “encouraging headlines” about inflation control, there is a “hidden crisis for businesses”, said The Telegraph. The Iran war triggered one of the largest energy shocks in history, meaning businesses were “swallowing soaring costs to spare shoppers”.
“Input rises” for producers climbed by “8.7% year on year in May”, larger than the 7.9% in April and the highest in more than three years. On the bright side, this means the economy may avoid a dreaded “wage-price spiral”, but conversely lower margins could lead to increased pressure on the employment market.
Hong Kong graduates believe the city’s finance industry is its most attractive and stable sector, making them more optimistic about career opportunities than their global peers, according to a study by the CFA Institute, which trains investment managers.
The US-based institute’s “2026 Graduate Outlook Survey”, released on Wednesday, found that 71 per cent of Hong Kong graduates rated their career prospects between eight and 10 out of 10. The global average for that level of optimism was 59 per cent.
The graduates’ view of careers in finance reflected “both the sector’s resilience and Hong Kong’s continued strength as an international financial centre, which ranks third worldwide and first in Asia-Pacific”, the institute said in a statement.
The findings also indicated that young people were confident about Hong Kong’s role as an international financial centre, resilient amid global uncertainties, and strategically focused on improving skills, it said.
That confidence was “deeply grounded”, it said, with nearly 90 per cent believing they had the skills to succeed and clearly understood what employers were looking for, notwithstanding the wider adoption of artificial intelligence in the city.
“Rather than viewing AI as a threat, 38 per cent of Hong Kong graduates believe it has no negative impact on their job hunting, and 37 per cent believe it makes securing a job easier,” the institute said. “Three quarters are already actively using AI tools in their job applications, demonstrating a proactive, tool-first mindset.”
