Jamie Dimon says JPMorgan is hoarding cash because 'very good chance' inflation is here to stay
JPMorgan Chase has been "effectively stockpiling" cash rather than using it to buy Treasuries or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said Monday during a conference. The biggest U.S. bank by assets has positioned itself to benefit from rising interest rates, which will let it buy higher-yielding assets, he said.
"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," said Dimon, longtime JPMorgan CEO.
"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," Dimon said. "I do expect to see higher rates and more inflation, and we're prepared for that."
Dimon waded into the ongoing debate on whether higher inflation is a result of temporary aspects of the reopening, like raw material shortages or supply chain issues, or if it could be more lasting. Fed officials have called the current spike in inflation transitory, meaning temporary and short-lived. But there are increasingly voices, including Deutsche Bank economists and hedge fund billionaires, who warn of consequences should the Fed ignore inflation.
