Jamie Dimon says the Fed should hold off on rate cuts as its credibility 'is a little bit at stake'

• Jamie Dimon said the Federal Reserve should delay cutting interest rates until after June.
• The JPMorgan Chase CEO said the Fed should wait for more data before cutting rates.
• Despite the market's optimism, Dimon predicted a 65% chance of a recession in the next two years.

JPMorgan Chase CEO Jamie Dimon says the US Federal Reserve should wait until the second half of the year before cutting interest rates.

"I think they have to be data-dependent," Dimon said during a Tuesday-morning session of the Australian Financial Review Business Summit. "If I were them, I would wait."

After all, "they can always cut it quickly and dramatically," said Dimon, who dialed into the event remotely. "Their credibility is a little bit at stake here. I would even wait past June and let it all sort out.”

Dimon's caution is based on his view that even though the US economy is "kind of booming" right now, there's still a risk it could enter a recession.

The Fed has cut interest rates multiple times since March 2022 to cool high inflation while trying to steer the economy into making what's known as a "soft landing" — when the economy cools enough to bring inflation down without falling into a recession.

The US economy appears resilient even after numerous rounds of interest-rate hikes. Job growth remains robust, and consumer spending is still strong.

So, the market is pricing in a 70% to 80% chance of a soft landing. Dimon, however, said that "the chance of a soft landing in the next year or two is half that."

Dimon also said the probability of a US recession in the next one to two years was about 65%.

"That's almost off the table if you look at people's projections. I wouldn't take it off the table yet," he said, referring to the possibility of a downturn.