1/10/2023: The Fed Will Keep Interest Rates High
Both Jamie Dimon and Former Fed President Said Fed Unlikely to Buck Down
According to a WSJ report, JP Morgan Chase CEO Jamie Dimon said Tuesday morning in an interview that the central bank should go to the 5% rate and then take a pause. He also said that the Fed may need to raise interest rates to 6% to fight inflation, which would be higher than most are expecting this year. Mr. Dimon said that inflation will come down but won’t quite go down the way people expected. The Fed’s mandate of keeping inflation under 2% will likely keep the rates elevated.
The former Fed President also said in an interview as shown above that the Fed will keep the rate high because they couldn’t afford to make another “transitory inflation” mistake. If the rates are kept around 5% for a while, there probably will be a bit of turbulence for the US economy and asset pricing. 2023 is going to be a very interesting year.