Saying his company will “be very patient” as inflation fears permeate the minds of investors, JPMorgan Chase CEO Jamie Dimon is leaning heavily on cash for the present time.
“We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,” Dimon said Monday during a conference.
“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates. I do expect to see higher rates and more inflation, and we’re prepared for that.”
As the possibility of higher inflation looms, speculators are watching to see whether a lasting rise in costs could force the Federal Reserve to raise interest rates.
Ultimately, at issue is the cause of inflation and the potential duration. Although the Fed believes it’s a temporary concern, many hedge fund experts – as well as Deutsche Bank economists – are on the other side.
Morgan Stanley CEO James Gorman told CNBC on Monday that he’s in the latter camp as well, believing interest rates will have to be boosted soon.
“The question is when does the Fed move?” Gorman said. “It has to move at some point, and I think the bias is more likely earlier than what the current dots suggest, rather than later.″
Dimon said he believes the economy will strengthen, and said JPMorgan’s bond and equity trading division is expected to collect $6 billion in revenue this quarter, and its investment bank is on a record pace.
“I would just use a number like up 20 percent from both prior year and prior quarter. It could be 15 percent to 20 percent,” Dimon said.