On Wednesday’s broadcast of CNBC’s “Power Lunch,” JPMorgan Chase Chairman and CEO Jamie Dimon said that fiscal policy is contradicting the Federal Reserve’s efforts to fight inflation and that we’re currently paying for continuing COVID spending and quantitative easing for too long.
CNBC Senior Banking Reporter Leslie Picker asked, “Well, how do you see that net/net playing out? Because you mentioned the fiscal spending side of it, and then that’s concurrent with QT. So, they’re kind of running counter to each other.”
Dimon answered, “They are. Yeah. There are contradictions in raising short rates, we still have a lot of liquidity, they’re taking the liquidity out. But you know, the curve, a natural curve, one day might be three-and-a-half on the short end and five in the ten-year end. And that’s maybe where we’re going. So, what it leads to in the short-run economy, I don’t know. I think some of these things can have real problems down the road if we don’t deal with them today. You’re really better off dealing with them today than just letting them get worse over time.”
He added, “[W]e continued spending and we continued QT — QE for too long. And we’re going to pay — we’re paying a price for that. And hopefully, it won’t be too big a price.”
Follow Ian Hanchett on Twitter @IanHanchett
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