Moneycontrol
Last Updated : Dec 07, 2018 10:24 AM IST | Source: CNBC-TV18

Yield curve doesn't spell recession, expect Fed to hike rates in December: JPMorgan's Jamie Dimon

Dimon added that he is upbeat on the US economy.

CNBC TV18 @moneycontrolcom
5. Jamie Dimon | CEO of JPMorgan Chase | Age: 62 | Net worth: $1.31 billion (Image: Reuters)
5. Jamie Dimon | CEO of JPMorgan Chase | Age: 62 | Net worth: $1.31 billion (Image: Reuters)

Jamie Dimon, Chairman and CEO of JPMorgan Chase, said he is upbeat on the US economy and added that "the yield curve doesn't spell recession at all".

“We are still having strong American economy. We spoke to most of the CEOs, they said the order books are good, consumer balance sheets are good, the economy is growing, the wage is going up, they are still hiring people, that is all good. On the other side, we have a bunch of geopolitical stuff, oil, brexit,” said Dimon, in an interview with CNBC. He expects a rate hike by Federal Reserve in December.

The S&P 500 and the Dow Jones Industrial Average slipped back into losses for the year on Thursday as US stocks slid on mounting worries of slowing global growth after a fresh twist in China-US tensions as well as falling oil prices and US bond yields.

The Dow sank more than 3 percent, or over 750 points, while the S&P and the Nasdaq shed roughly 2.5 percent, adding to a more than 3 percent tumble for the three indexes on December 4.

However, Dallas Fed president Robert Kaplan said that "the expectations of future growth are sluggish".

"The short end of the curve is reacting to what the Fed has been saying, the long end of the curve tells me that expectations of future growth are sluggish. I am seeing input costs are rising, tariffs is a part of it but it is not the only part of it and companies - many of them are struggling to pass on those cost increases to their customers and you are seeing margin erosion and we are also seeing some deceleration of expectations for next year's earnings growth of a high base. When you put all that together, I think there is a lot more uncertainty and it is very consistent with what I hear from companies I talk to and what we see in our surveys and I think the implications for me and my job as a central banker - getting into 2 to 2.25 - I have had a lot of confidence that we should be moving along. I think at this stage you are going to hear me being much more cautious." Kaplan said.

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First Published on Dec 7, 2018 10:24 am
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