JPMorgan CEO Jamie Dimon believes the Federal Reserve could hike rates more times in 2022 than some have speculated, saying as many as half a dozen or more rate hikes could be possible.
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“The table for growth is pretty well set,” Dimon said during the bank’s Friday conference call, “where the downside obviously is inflation and how that’s being managed and whatnot.”
“In my opinion, there’s a pretty good chance it will be more than 4,” Dimon continued. “It could be 6 or 7.”
Dimon explained, “I grew up in a world where [Carter and Reagan-era Fed chief Paul Volcker] raised rates by 200 basis points on a Saturday night. And this whole notion that it’s going to be kinda sweet and gentle and nobody’s ever going to be surprised, I think is a mistake, but that doesn’t mean we won’t have growth.
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Dimon’s forecast comes after analysts at Goldman Sachs said earlier this week that the bank expects the Fed to make four rate hikes in 2022 and that the central bank will start reducing its balance sheet by July. Meanwhile, Bank of America expects interest rates to be hiked three times over the course of the year.
The Fed is under fire for not acting sooner to stem inflation, which hit a near 40-year high of 7% on an annualized basis in December. The ongoing surge in inflation, which Fed officials promised last year would be “temporary”, is now increasing pressure on the Fed to start raising rates sooner rather than later in a bid to curb rising prices.
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“Later this year, if things work out as expected, we will normalize monetary policy, which means we will end our asset purchases in March, which means we will hike rates throughout the year,” the Fed said Chairman Jerome Powell told the Senate Banking Committee during its confirmation hearing on Tuesday. “Sometime maybe later this year we will start to let the balance sheet expire and that’s just the way to normalize politics.”
Megan Henney of FOX Business contributed to this report.