- Jimmy Damon, CEO of JPMorgan, supports Jerome Powell’s approach To reduce interest rates amid economic uncertainty, despite President Trump’s criticism, which he described as “very late Powell.” Damon warns that although the economy seems stable now, future risks-such as high debts, inflation and geopolitical tensions-spoiled the waiting and vision strategy at the Federal Reserve.
While Jerome Powell’s strategy “waiting and seeing” may not impress the oval office, it has been supported Jpmorgan Chase CEO Jimmy Damon in the veteran role of Wall Street in an unconfirmed economic view.
While Damon was more positive than others Trump’s marketing sounds like DefinitionsJPMorgan president still does not take any negative results from the table.
This includes the recession, in addition to the soft drop organized by the Federal Reserve Chairman Powell carefully that does not come to permanent fruits.
The Federal Reserve weighs a set of mixed signals in the data at the present time: Bond proceeds Crawl In the past two days, work confidence fluctuates, and inflation remains relatively flat (though Latest data It did not include the most aggressive increases in China) and Unemployment Stay somewhat fixed In 4.2 %.
As such, Damon says that the FOOC Open Market Committee (FOMC) has justified what he justifies – even if he had won the chair president “after it was too late Powell” from Trump.
“There is always an idea that the Federal Reserve is totally capable and can do everything he wants,” said Damon. Bloomberg At the World Bank’s World Summit in Shanghai. “They put short -term prices, but they also have to follow the facts. So they raise rates because inflation has risen, and they cannot control them today.”
In recent days, the Federal Reserve’s attention has turned into an activity in the bond market, as revenue has increased, anxious about the financial health of the US economy.
Fears about How the national debt burden of $ 36.2 trillion increasesWith some questioning whether it will remain a safe haven for assets.
In the past, the American bond market was a port in the storm, where foreign countries buy government debts with confidence that it will not only be paid, but with part of the interest.
With the increase in the proportion of debt to the gross domestic product of AmericaPay questions about How will Uncle Sam be able to raise his bills, Increasing speculation that the central bank may have to interfere with a form of quantitative mitigation To cover costs.
Even the phrase “QE” can pay an unstable reaction from economists – after all, it will mainly reduce the value of the dollar, the world’s main backup currency, and the economic stability of the American economy.
“These bonds are sold every day,” said Damon. “This is done by investors around the world. (Federal Reserve) cannot control all of this. Foreigners have $ 35 trillion of US trading financial assets. Thus … ((Federal Reserve) must interact with reality … and this is not cash. They say they depend on data, but they have to wait and see exactly what is happening and do the right thing.”
Future concerns against the current pressure
The caution tone of Powell in 2025 drew the anger of the Oval Office – perhaps not surprising given the fact that President Trump was pressing FOMC even on the Campaign’s path.
at that timePowell Powell was not to reduce, which could give Biden Camp an economic victory if he did so. When securing the White House, Trump changed, And he wanted to see the basic price comes under.
The pressure in Trump’s installation continued even saying that he could shoot Powell if he did not announce a reduction in interest rates, before he quickly retracted the suspension when the market’s reaction was concerned that the federal reserve independence was at risk.
While Trump has reduced his threats, he had Hold the title “Powell Powell” to the Federal Reserve President.
But Damon said a A relatively stable image in the current environment is not a guarantee of the future. “I do not agree that we are in a beautiful place. You have to separate two things. The economy was in good condition. All the facts (that indicate) were on a soft drop.
“This does not tell you what the future will be. To worry about the future, look at all things that affect the future (and) a kind of work on your way to the current day. I have already mentioned a great deficit, and we have not finished quantum tightening yet, and there are huge geopolitical issues,
“So I think they are doing the right thing to wait and irrigate before they decide.”
This story was originally shown on Fortune.com
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