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Dimon on likely result of Fed tightening, QE unwinding: 'It'll be fine'


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Dimon on likely result of Fed tightening, QE unwinding: 'It'll be fine'

JPMorgan Chase & Co. Chairman, President and CEO Jamie Dimon said in a television interview that the Federal Reserve's monetary policy was likely a smart move and would not become disruptive so long as the economy stayed strong.

The Fed's policy-making Federal Open Market Committee has increased its target federal funds rate four times since December 2015, pulling up the key benchmark from near-zero levels that it maintained throughout the financial crisis. The Fed in July detailed how it will unwind its $4.5 trillion balance sheet, which it built up through buying securities in programs known as quantitative easing, or QE. The Fed has not begun reducing the size of its balance sheet.

In an interview on CNBC, Dimon acknowledged that "there's a chance this will not go well" because reversing such a large buildup of assets is unprecedented. But if things don't go as planned, he said, "they'll figure it out. The Fed will respond appropriately."

"My view is the Fed is doing the right things: raising rates, telling people they're going to start reducing the balance sheet," he said. "The likely outcome is that it'll be fine."

On other subjects, Dimon reiterated calls for tax reform and infrastructure spending. When asked if he sees a bubble in the bond market, he noted that in the current environment, in which bond prices are high and spreads are low, he wouldn't buy government debt.

"I'm not going to call it a bubble," Dimon said, "but I personally wouldn't be buying 10-year sovereign debt anywhere around the world."