JPMorgan CEO Jamie Dimon’s Dire Warning on 8% Interest Rate

JPMorgan chief executive officer (CEO) Jamie Dimon in a new shareholder letter on Monday said interest rates in the U.S. can rise to as high as 8% or more amid persistent inflationary pressures driven by fiscal deficits and military conflict among other factors.

Bitcoin remains a viable option amid high inflationary risks as a hedge against inflation, but crypto traders consider interest rate cuts an important factor for further rally in Bitcoin price.

JPMorgan CEO Jamie Dimon Warns Sky-High Inflation

Jamie Dimon in his 61-page letter talked about banking and AI to global economic risks and geopolitical concerns and and ways to make the US economy resilient and strong.

As per JPMorgan CEO, interest rates as high as 8% is still on the table amid rising inflation witnessed in recent CPI, PPI, and PCE reports. The Fed Chair Jerome Powell still sees three rate cuts this year, but other Fed officials warn rate cuts may not come this year. The current interest rates are 5.25-5.50%.

“Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world and the restructuring of global trade—all are inflationary,” wrote Dimon.

The potential for “stagflation,” a recession characterized by lingering high inflation, is still high. However, the labor market remains strong in the United States. He added that federal deficit is a real issue hurting business confidence and believes government spending could keep rates high. He is also not confident about soft landing as the market is pricing in a 70-80% chance of a soft landing.

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Can Bitcoin Benefit?

While JPMorgan warned about rising digital trades, he didn’t warn about Bitcoin and digital assets. The decision could also be related to his recent statement that “He’s done talking about Bitcoin.”

Crypto experts assert Bitcoin price will move upwards despite inflationary pressure. Bitcoin as a hedge against inflation has provided better gains and price movements are better in bull market.

Some Bitcoin products such as spot Bitcoin ETF could see the impact as institutions could consider macro factors more for investing in the top cryptocurrency. However, the recent price gains after spot Bitcoin ETFs revealed high demand could increase BTC price beyond $100K.

BTC price currently trades at $71,653, up over 3% in the last 24 hours. The trading volume has also increased by over 80%, indicating massive demand ahead Bitcoin halving.

Also Read: Top Analyst Predicts BTC Rally To $85K Despite Liquidation Warning