JPMorgan CEO Jamie Dimon said the US Federal Reserve will have a hard time cutting the interest rate unless inflation drops, and isn’t worried about stablecoins posing a threat to the banking sector.
“If inflation does not go away, it’s going to be hard for the Fed to cut more,” Dimon, the head of the largest bank in the US, told CNBC-TV18 on Monday.
“Inflation seems a little bit stuck at 3%. Again, I can give you some arguments why it’s going to go up, not down,” he said, adding he’s hopeful for “decent growth” and a rate cut instead of the Fed cutting rates due to a recession.
Market expects multiple rate cuts
Dimon’s expectation has thrown some cold water on the market’s expectation of multiple rate cuts, with some expecting up to five cuts over the next 12 months.
Interest rate cuts have typically been a boon for crypto markets, as cheaper borrowing gives investors confidence to bet on riskier assets. The Fed cut rates by 25 basis points on Wednesday for the first time in 2025, which spurred Bitcoin (BTC) to over $117,500 for the first time in more than a month.
CME FedWatch data shows the market is expecting another 25 basis point cut when the Fed meets in late October, and the same again when it meets in early December.
Jamie Dimon in an interview on CNBC-TV18 on Monday. Source: YouTube
The Feds’ projections show a wide disparity, but hint at two more cuts to come before the end of the year, with another possibly taking place in 2026.
The latest US inflation data released on Sept. 11 showed inflation rose 0.4% in August, marking a 2.9% rise over the last 12 months, above the Fed’s target inflation rate of 2%.
Dimon “not particularly worried” about stablecoins
Dimon separately weighed in on stablecoins, which have become a key policy issue for banks after Congress passed laws regulating the tokens in July.
Dimon said he’s “not particularly worried about” stablecoins, but his bank and others in the sector “should be on top of it and understand it.”
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“There’ll be people who want to own dollars through a stablecoin outside the US, from bad guys to good guys to certain countries where you’re probably better off having dollars and not putting into the banking system,” he said.
He reiterated that JPMorgan is involved in stablecoins and the banking sector is “looking at whether they should have a consortium” to launch a token.
“I’m not sure central banks need to use it among themselves, so it’ll develop over time,” he said.
Banking groups have urged Congress to tighten up the stablecoin laws, claiming loopholes allow stablecoin issuers and their affiliates to pay interest or yields on stablecoins, arguing that it could undercut bank accounts and destabilize the banking system.
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