Jamie Dimon, CEO of JPMorgan, believes that the Federal Reserve could raise interest rates more times in 2022 than some people have speculated, saying even a half dozen or more rate hikes might be a possibility.
The table is set well for growth, with the negative being inflation and how that gets navigated, and stuff like that, according to Dimon during the bank's earnings call on Friday. My view is that there is a good chance there will be more than 4, according to Dimon. Dimon said he grew up in a world where Carter and Reagan-era Fed chief Paul Volcker raised interest by 200 basis points on a Saturday night. And this whole idea that somehow it s going to be sweet and gentle and no one is ever going to be surprised I think is a mistake, but that does not mean we won't have growth. The central bank would start reducing its balance sheet by July, according to analysts of Goldman Sachs, who said earlier this week that the bank expects the Fed to make four interest rate hikes in 2022. The Bank of America anticipates that rates will get bumped up three times over the year.
The Fed has been under fire for not acting sooner in order to curb inflation, which hit a nearly 40 year high of 7% in December on an annualized basis. The Fed said last year that the inflation surge would be transitory and is now adding pressure on the Fed to raise rates sooner rather than later to curb rising prices.
As we move through this year, if things as expected, we ll be normalizing policy, meaning we will end our asset purchases in March, meaning we ll be raising rates over the course of the year, Jerome Powell told the Senate Banking Committee on Tuesday. At some point later this year, we will start to allow the balance sheet to run off, and that is just the road to normalizing policy.