We’ve been hearing for months now that interest rates are expected to go down this year. Heck, we’ve even reported on it more than once. But here we are, still waiting around anxiously like a Swiftie in the ticket line. When is it going to happen? Well, it really depends on who you ask. If one of the biggest dogs in the banking world is barking correctly, it may not.
Here are Five Fast Facts on downer predictions about interest rates:
- 📣 The Markets Say… - We keep hearing that inflation is going down and jobs reports keep telling us that the economy is strong, so the markets have been banking on the Fed dropping interest rates several times this year. Now people are scratching their heads and thinking maybe just once or twice.
- 🐕 The Biggest Dog On The Block - JP Morgan Chase is easily the biggest bank in America, with around $2.7 trillion in assets. The CEO is Jamie Dimon, a billionaire with most of his wealth tied up in the performance of his bank (that’s one helluva good incentive to be right!)
- ✋ Staying Put - Dimon recently came out with some downer statements about the economy and interest rates. He said he thinks that interest rates may very well go up instead of down, as high as 8%, maybe even more.
- 🤔 Justification - Dimon cites “unprecedented monetary policy” taken over the last couple years to combat historic inflation, as well as the potential for “stagflation” which is when we get both a recession and inflation at the same time. Oh, goodie, that sounds like fun. (Hint: it’s not, ask anyone who lived through the Carter years)
- 😱 Historically Speaking - The 5.3% bank rate we currently have is already the highest in more than two decades; the last time we got up to 8% was in 1990. You know, back when the music was still good and cell phones weren’t even in those bags yet.
🔥Bottom line: Dimon could be wrong, of course. Most people still think the rates will come down and everything will be hunky dory by the end of the year. But if Dimon is right, things could get even rougher in the near future.
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