Jamie Dimon said that whereas he doubts the wave of negative interest rates in nations worldwide will attain the U.S., he’s preparing J.P. Morgan Chase for the possibility anyway.
“I don’t think we’ll have zero charges within the U.S., however, we’re thinking about how to be ready for it, simply within the regular course of risk management,” Dimon stated Tuesday at a convention in New York.
“You’ve got to fret about the long-term impact of these rates of interest,” Dimon mentioned. “But it surely’s difficult. There are companies it doesn’t affect at all. And there are businesses where it simply sucks into your margin, and there’s very little you can do about it.”
Dimon, CEO, and chairman of J.P. Morgan admitted that the drop in U.S. interest rates stunned him. Last year, he said that charges ought to rise and that the 10-year Treasury yield could reach 4%.
The 10-year yield was at 1.69% on Tuesday, down from 2.68% to begin the year. It fell as little as 1.44% last month as buyers rushed into Treasuries on dreads of a global economic slowdown and because the Federal Reserve reduce rates. Benchmark bonds in major countries like Germany are trading with negative yields.
The bank can trim prices and cost clients more account fees to make up for squeezed margins as charges fall, Dimon stated.
Federal Reserve Chair Jerome Powell has been a lightning rod for President Trump who has steadily hammered the Fed in tweets over rates being too high as Japan, China and eurozone countries cut charges.