Raise rates ‘sooner rather than later,’ urges JPMorgan CEO Dimon

Jamie Dimon, chairman and CEO of JPMorgan Chase, told a gathering of financiers in Washington, D.C., on Monday that timing is right for the Federal Reserve to raise interest rates as the economy is humming along and called for more infrastructure investment to stir growth. “Twenty-five basis points is a drop in the bucket,” Dimon said in an on-stage interview at a luncheon hosted by the Economic Club of Washington, D.C. “Let’s just raise rates. You don’t want to be behind the 8-ball. “I’d go sooner rather than later,” he said.

Investors are generally more bullish on banks when interest rates are higher as their earnings benefit from interest income derived from customers paying more for loans.

Fed policymakers will meet Sept. 20-21 to decide whether to raise interest rates for the first time this year amid a tepidly growing economy. In its “Beige Book” released last week, the Federal Reserve said the economy expanded modestly in July and August due to heightened manufacturing activity and strong job growth.

But it also said the economy has expanded at a sluggish pace for three consecutive quarters.

Dimon, whose company is the nation’s largest bank by assets, expressed optimism when asked by the interviewer, David Rubenstein, co-founder and coCEO of private equity firm The Carlyle Group, about the state of the economy.

“There’s no immediate potholes,” Dimon said, pointing to rising employment, higher wages and a robust housing

market. But the executive also expressed concern about the quality of inner-city schools, the rising student loan debt and wage inequality.

“We need more infrastructure investment,” he said, arguing that spending to improve schools, bridges and roads shouldn’t be a partisan issue. “Growth will fix wage inequality.”

Dimon, who in the past has described himself as a Democrat, said he is asked often about the impact of regulations but dismissed the argument that they impede corporate growth. “It’s my job to deal with regulations,” he said. “The interest of your country should come before the interest of your company or industry.”

Dimon also largely defended the Dodd–Frank Wall Street Reform and Consumer Protection Act, crediting it for restoring banks’ capital holdings and consumer confidence following the 2008 financial crisis. The banking system “is in unbelievable shape, he said.

“The system is recovered. And Dodd-Frank is partially responsible.”

He added, “I’m not in favor of throwing (Dodd-Frank) out and starting from the ground up,” countering critics who have called for its repeal.