Jamie Dimon is skeptical about a soft landing after rate cut

“I’m a little more skeptical than other people. I give it a lower chance,” he said Friday at the Atlantic Festival event in Washington. “I hope it’s true, but I’m also more skeptical that inflation is going to go away that easily, not because it hasn’t come down — it has — and it could come down further.”

The rate cut will have virtually no effect on the presidential election, the CEO of the largest US bank added, when asked whether there would be an impact.

The Federal Reserve cut its key interest rate by half a percentage point on Wednesday in a policy shift aimed at achieving a so-called soft landing. Ahead of the decision, Dimon said whether it cut rates by 25 or 50 basis points, it wouldn’t be “earth-shattering.”

The company’s CEO has warned for more than a year that inflation could be more persistent than investors expect, citing factors such as deficit spending and the “remilitarization of the world.” In April, he wrote in his annual shareholder letter that JPMorgan is prepared for interest rates of 2% to 8% or more.

“I wouldn’t count my eggs,” Dimon said of the soft landing. “We may have gone from a lower rate, lower inflation, to a slightly higher rate, higher inflation. Whatever it is, we’ll deal with it later. Economists are used to dealing with that. It’s not a disaster.”