• Jamie Dimon says the Federal Reserve shouldn't be in a rush to cut interest rates. 
  • He told Swiss newspaper NZZ that several factors could cause inflation to rebound.
  • It's a point he's made consistently this year, in contrast to the market's soft landing optimism.

The market is laying bets that the Federal Reserve is on the cusp on cutting interest rates, but Jamie Dimon thinks the central bank is at risk of moving too soon.

The JPMorgan chief told Swiss newspaper NZZ that inflation might not settle down for good, even though it has been moving steadily lower since peaking in the summer of 2022.

"It would be good if the Fed waited now," Dimon said in an interview published Wednesday. "I think there are a lot of reasons why inflation could rise again in the future: increasing government spending, the re-militarization of the world, the extraordinary investments in the green economy, the restructuring of trade."

Dimon has consistently emphasized this perspective throughout the year, but it is increasingly out of step with what markets expect. Though the Fed has kept rates unchanged so far in 2024, recent inflation and labor market softness have convinced Wall Street that policy could begin easing as soon as September.

Even Fed officials have shown growing optimism. On Wednesday, Fed Governor Christopher Waller indicated that rate cuts appear likely "in the not-too-distant future," as long as inflation keeps cooling.

Dimon's pushback has always been oriented toward the long-term outlook.

"Don't get lulled into a false sense of security because the today looks okay, that tomorrow is gonna be okay," he told The Wall Street Journal in April.

In commentary attached to JPMorgan's recent earnings release this month, Dimon reiterated that both inflation and interest rates will likely stay higher than markets anticipate. To him, investors' conviction that a soft landing is in the cards amounts to "a lot of happy talk," he said in May.

In his interview with NZZ, Dimon also warned about geopolitical fragmentation but aimed his most pointed words towards private credit — an obscure sector of finance free of strict oversight.

"Private credit is growing like a weed and could cause systemic problems," he said, discussing what happens when regulation restrains public banks. "Companies are being driven out of the public markets and are increasingly being held in private hands."

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