Despite the Fitch Ratings downgrade of the United States' long-term credit rating, Jamie Dimon, CEO of JPMorgan Chase, told CNBC on Wednesday that it has no notable effect. He asserted that it is the market, rather than rating agencies, that determines borrowing costs. Dimon also declared it "ridiculous" that other countries, such as Canada, are granted a higher rating than the U.S., which he believes is largely due to its stability and military.
Jamie Dimon, CEO of JPMorgan Chase, maintains that the Fitch Ratings downgrade of the United States' long-term credit rating is not of major concern. On Wednesday, Dimon told CNBC's Leslie Picker that while the market, rather than rating agencies, determines borrowing costs, it is "ridiculous" that Canada's credit rating surpasses that of the U.S., considering the U.S. is still the planet's most prosperous and secure nation. Dimon noted the debts rating downgrade came after Congress could not agree on raising the debt ceiling, nearly leading to default, and he added that getting rid of the debt ceiling would be advisable to avoid future market uncertainty.
In this wide-ranging interview, Dimon spoke on a number of subjects which included artificial intelligence, the US economy, bank regulation and the implications of geopolitics. ChatGPT and other AI technologies were labelled as "gamechangers" by Dimon which will help future generations live longer and better lives, although he did emphasise that it needed to be done correctly as "bad guys" may misuse it. The US economy in his opinion is strong, with consumer and business confidence, low unemployment and healthy balance sheets. He then warned of the risks that geopolitical tensions, such as the Ukraine war and the Federal Reserve's quantitative tightening, posed to the economy.
Dimon harshly criticized regulators' moves to increase control of American banks, claiming that the plans revealed the prior week were "extremely disappointing". To make his point, he displayed a diagram presenting the numerous regulators banks are subject to. According to Dimon, this escalation in capital requirements would have a negative effect on customers, since banks would likely be driven out of some sectors, much like what happened in the U.S. mortgage business, where firms such as Rocket Mortgage are now leading players. The rules also include banks giving up their own internal risk models for the standard Federal Reserve ones. Regarding this, Dimon cautioned that the Fed should "be cautious in saying their models are perfect", as they failed to predict a 5% interest rate or inflation.
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