Jamie Dimon says JPMorgan is sitting on about $500 billion in cash, waiting to invest in higher rates

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Article corrected all through to mirror Jamie Dimon stated the financial institution has $500 billion in money, not $500 million, per an incorrect transcript.

Banking big JPMorgan has been sitting on about a half-trillion-dollar stockpile of money, waiting to invest in higher rates in the approaching months, as an alternative of shopping for Treasurys or different securities, Chief Executive Jamie Dimon stated Monday at a digital banking convention.

“We do expect rates to stay low for a bit longer; the Fed has told us that,” Dimon, the longtime boss of JPMorgan Chase & Co.,
JPM,
-1.70%

stated Monday on the Morgan Stanley U.S. Financial Services Conference, per an preliminary transcript of the discuss.

But “if you look at our balance sheet, we have like $500 billion in cash and we’ve actually been stockpiling more and more cash waiting for [an] opportunity to invest in higher rates,” Dimon stated.

The plan goals to place the financial institution to “benefit from rising rates both from the short end and the long run and long rates,” he stated, including that it’ll hinge “on the decision we make over the next six to nine months.”

“But I do expect you are going to see higher rates and more inflation today.”

The yield on the 10-year Treasury word
TMUBMUSD10Y,
1.498%

rose about 3.7 foundation factors on Monday to 1.499%, properly off the 1.749% excessive for the yr hit in March, however nonetheless up about 60 foundation factors on the yr, in accordance to Dow Jones Market Data.

The Federal Reserve’s rate-setting gathers for 2 days this week, beginning Tuesday, with traders awaiting a coverage replace Wednesday to see how the central financial institution is grappling with proof of surging inflation in current months, but in addition slack in the job market in the course of the COVID pandemic restoration.

Check out: Inflation scare? Check out this chart before freaking out

Investors additionally will probably be listening to any hints of change in phrases of the Fed’s outlook for rates and round future plans for its month-to-month asset purchases, considered as a primary step to tightening its easy-monetary stance.

Read: Paul Tudor Jones sees ‘green light to bet heavily on every inflation trade’ if Fed ignores price pressures Wednesday

The U.S. central financial institution at current buys about $80 billion of Treasurys and $40 billion of mortgage-backed securities every month, whereas protecting benchmark curiosity rates between 0% and 0.25%.

But whereas inflation has been surprisingly sizzling, many economists and strategists count on the Fed to wait till the autumn to see how the labor market responds to the inflation spike.

Read: Don’t be fooled by some of the hawkish sounds coming out of the Fed this week

Stocks completed largely higher Monday ahead of the Fed update, with the Nasdaq Composite Index
COMP,
+0.74%

and the S&P 500 index
SPX,
+0.18%

closing at recent information and Dow Jones Industrial Average
DJIA,
-0.25%

ending off the day’s lows.

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