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JPMorgan stockpiling cash, waiting for interest rates to rise -CEO

EconomyJun 14, 2021 07:57PM ET
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© Reuters. FILE PHOTO: JPMorgan Chase CEO Jamie Dimon speaks at the North America's Building Trades Unions (NABTU) 2019 legislative conference in Washington, U.S., April 9, 2019. REUTERS/Jeenah Moon

NEW YORK (Reuters) -JPMorgan Chase & Co Chief Executive Jamie Dimon said on Monday the bank is holding around $500 billion in cash, putting it in a position to benefit from higher interest rates.

"We've actually been effectively stockpiling more and more cash, waiting for opportunities to invest at higher rates," Dimon said during a virtual conference held by Morgan Stanley (NYSE:MS). "So our balance sheet is positioned (to) benefit from rising rates."

Dimon, who heads the largest U.S. bank by assets, said he expects rising inflation to result in higher interest rates over the next 9 months.

"I think you're also going to have a very, very strong economy," which will also benefit the retail bank, he said. "We try to take all that in consideration (when) we manage the balance sheet."

The Federal Reserve is expected to make a statement on Wednesday that will indicate when the U.S. central bank is likely to begin paring back its unprecedented monetary stimulus.

The Fed's preferred inflation gauge, the core personal consumption expenditures price index, jumped in April to 3.1%, its highest annual rate since July 1992.

Dimon also forecast that the bank's bond and equity trading division will make $6 billion in revenues this quarter, and its investment bank may report one of its best-ever quarters.

"I would just use a number like up 20% from both prior year and prior quarter. It could be 15% to 20%," Dimon said.

Dimon said the investment bank is benefiting from several big deals that "may or may not close" this quarter, as well as strong client activity in equities and debt capital markets and mergers and acquisitions.

JPMorgan stockpiling cash, waiting for interest rates to rise -CEO
 

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Comments (4)
Benjamin McIntire
Benjamin McIntire Jun 14, 2021 11:21PM ET
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Once the bubble is sufficiently inflates the musical chairs begins.
Max Gothe
Max Gothe Jun 14, 2021 3:04PM ET
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In other words.. the stockmarket is about to throw a tantrum if the Feds raise rates or withdraw stimulus. Buy puts. Buy gold. Forget bitcoin. Be a champ...
NATURAL TREASURES
NATURAL TREASURES Jun 14, 2021 2:12PM ET
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Anticipation of rising interest is consequent of stronger economy ahead . Cash pile to benefit banks reallocation of balance sheet. A great foresight in coming 9 months where to put your money
NATURAL TREASURES
NATURAL TREASURES Jun 14, 2021 2:11PM ET
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Anticipation of rising interest is consequent of stronger economy ahead . Cash pile to benefit banks reallocation of balance sheet. A great foresight in coming 9 months where to put your money
 
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