- JPMorgan CEO Jamie Dimon supports Jerome Powell’s cautious approach to interest rate cuts amid economic uncertainty, despite criticism from President Trump, who has labeled him “Too Late Powell.” Dimon warns that while the economy appears stable now, future risks—like rising debt, inflation, and geopolitical tensions—justify the Fed’s wait-and-see strategy.
While Jerome Powell’s ‘wait-and-see’ rate cut strategy might not be impressing the Oval Office, it’s been backed by JPMorgan Chase CEO Jamie Dimon as the Wall Street veteran eyes an uncertain economic outlook.
While Dimon has been more positive than other market-moving voices on Trump policies such as tariffs, the JPMorgan boss still isn’t taking any negative outcomes off the table.
This includes stagflation, plus Fed chairman Powell’s carefully orchestrated soft landing not coming to permanent fruition.
The Fed is weighing a bevy of mixed signals in the data at present: bond yields creeping relatively higher in the past couple of days, business confidence wobbling, inflation staying relatively flat (though that most recent data didn’t include the period of more aggressive increases on China), and the unemployment rate staying fairly steady at 4.2%.
As such, Dimon says the Federal Open Market Committee’s (FOMC) caution is justified—even if it has earned the chairman the nickname’ Too Late Powell’ from Trump.
“There’s always a notion that somehow the Fed is omnipotent and can do whatever it wants,” Dimon told Bloomberg at the bank’s Global China Summit in Shanghai. “And they do set short-term rates, but they also have to follow the facts. So they raise rates because inflation went up, and they can’t control it even today.”
In recent days, the Fed’s attention might have been turned to activity in the bond market, with yields creeping higher, spurred by concerns about the fiscal health of the American economy.
Fears about how sustainable America’s $36.2 trillion national debt burden is are rising, with some questioning whether it will remain an asset safe haven.
In the past, the U.S. bond market has been a port in the storm, with foreign nations buying government debt with confidence that they would not only be paid back but with a portion of interest.
As fears about America’s debt-to-GDP ratio increase, prompting questions about how Uncle Sam will be able to foot its bills, speculation is increasing that the central bank may be forced to step in with a form of quantitative easing to cover the costs.
Even the phrase ‘QE’ can prompt an uneasy reaction from economists—after all, it would essentially dilute the value of the dollar, the world’s principal reserve currency and a pillar of economic stability for the U.S. economy.
“These bonds are sold every day,” Dimon said. “That’s done by investors around the world. [The Fed] cannot control all that. Foreigners own $35 trillion of U.S. financial tradable assets. And so … [the Fed] have to react to reality … and that’s not a criticism. They say they’re data dependent, but they have to wait and see exactly what happens and then do the appropriate thing.”
Future fears vs present pressure
The tone of caution that Powell has set in 2025 has drawn the ire of the Oval Office—perhaps unsurprising given the fact that President Trump was pressuring the FOMC even on the campaign trail.
Back then, it was a case of pushing Powell not to cut, potentially giving the Biden camp an economic win if he did. Upon securing the White House, Trump’s tack changed, and he wanted to see the base rate come down.
The pressure continued to mount with Trump even saying he might fire Powell if he didn’t announce a cut to interest rates, before quickly retracting the comment when markets reacted with concern that the independence of the Fed was being jeopardized.
While Trump has scaled back his threats, he has stuck by the nickname of ‘Too Late Powell’ for the Fed chairman.
But Dimon said a relatively stable picture in the current environment is no guarantee of the future. The man known for running JP with a plan for every eventuality explained: “I don’t agree we’re in a sweet spot. You have to separate two things. The economy has been doing well. All the facts [suggest] we effectively [have] been in a soft landing.
“That does not tell you what the future is going to be. To worry about the future, look at all the things that affect the future [and] kind of work your way back to the current day. I’ve already mentioned huge deficits, we haven’t finished quantitative tightening yet, there are huge geopolitical issues, there are these inflationary factors out there and they have to react to all of that.
“So I think they’re doing the right thing to kind of wait and see before they decide.”
