Fed Faces Tough Path on Rate Cuts, Stablecoins Not a Banking Threat— Jamie Dimon

Quick Breakdown 

• Jamie Dimon warns persistent inflation could stall Fed’s plans for more rate cuts.
• Markets expect two more cuts in 2025 despite inflation sitting above target.
• Dimon dismisses stablecoins as a systemic threat but says banks should monitor the sector.

JPMorgan Chase CEO Jamie Dimon says persistent inflation could stall U.S. rate cuts, while dismissing stablecoins as a major risk to banks.

Fed cuts uncertain amid stubborn inflation

JPMorgan Chase chief executive Jamie Dimon has warned that the U.S. Federal Reserve will find it difficult to push ahead with interest rate cuts if inflation remains elevated.

“Inflation seems a little bit stuck at 3%. I can even make the case for it rising instead of falling,”

Dimon told CNBC-TV18 on Monday. He noted that while he expects “decent growth,” future cuts should come from economic strength rather than a recession-driven slowdown.

His remarks dampened market optimism, with traders having priced in up to five rate cuts over the next 12 months.

Crypto markets eye policy moves

Lower interest rates typically drive capital into risk assets like Bitcoin, which jumped above $117,500 last week after the Fed announced its first rate cut of 2025 — a 25 basis point reduction.

According to CME FedWatch data, investors expect another two cuts this year, one in October and one in December, though Fed projections remain widely split. U.S. inflation climbed 0.4% in August, with the annual rate hitting 2.9% — still above the central bank’s 2% target.

Dimon downplays stablecoin risks

Dimon also commented on the growing debate around stablecoins, which became subject to new congressional regulations in July. While acknowledging that the sector needs oversight, he said he is “not particularly worried” about their threat to banking stability.

“There will always be people who prefer dollars through a stablecoin, especially outside the U.S.,”

he noted, adding that JPMorgan is already engaged in exploring the technology. He also hinted at the possibility of banks forming a consortium to launch their own token.

Banking groups, however, continue to push for tighter rules, warning that interest-bearing stablecoins could undermine traditional deposits and destabilize the system.