Jamie Dimon thinks the Fed should wait longer to cut interest rates

"It would be good if the Fed waited now. I think there are a lot of reasons why inflation could rise again in the future," Jamie Dimon said.

• Jamie Dimon says the Federal Reserve shouldn't be in a rush to cut interest rates. 
• He told the 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 of cutting interest rates, but Jamie Dimon thinks the central bank is at risk of moving too soon.

The JPMorgan chief told the 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 has convinced Wall Street that policy could begin easing as soon as September.

Even Fed officials have shown growing optimism. On Wednesday, the Fed's governor, Christopher Waller, said that rate cuts are likely to appear "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 OK, that tomorrow is gonna be OK," 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 would likely stay higher than markets anticipate. He said in May that investors' conviction that a soft landing is in the cards amounts to "a lot of happy talk."

In his interview with NZZ, Dimon also warned about geopolitical fragmentation but aimed his most pointed words toward 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."