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JPMorgan Chase chief executive Jamie Dimon said Thursday that the Federal Reserve was right to raise interest rates in response to the growth of the US economy, but he is not surprised that current monetary policy embarrassed President Trump.
"I've never seen a president who wanted interest rates to rise," Dimon said during a phone interview with reporters, according to the Washington Examiner.
Dimon also said that Fed President Jerome Powell, who took office earlier this year, "is doing a great job."
Trump strongly criticized the Fed's rate hikes, saying last month that he was not happy with the latest hike. The president reiterated his criticisms this week, telling reporters that the Fed "went crazy" for setting higher rates. In a separate interview on "Fox and Friends" Fox News, Trump pointed out that President Barack Obama "was playing with funny money" with interest rates close to zero during his tenure at the White House.
"I pay interest at a high rate because of our Fed. And I would like our Fed not to be so aggressive because I think it's making a big mistake, "he said.
Trump's criticism was sparked by the volatility of US equities, with the Dow recording strong declines, in part because of worries about rising rates.
The Fed has raised interest rates eight times since 2015, including three increases this year, the resumption of inflation growth and hiring in the United States is continuing at a steady pace. The central bank is raising rates to avoid an "overheating" of the economy, a term used to describe a scenario in which rapid growth causes price hikes. Officials expect to raise the federal funds rate once again in 2018, then to three increases next year. Investors are preparing for a potential negative impact on corporate earnings due to rising rates, which also increases borrowing costs for consumers.
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Dimon said he expects interest rates to continue rising, adding that he has "much higher ratings" than "most of the rest" of the US Treasury yield at 4 years, reaching 4%. The benchmark return was set at 3.15% on Friday.
"The market may not support it as well if rates rise because it will surprise people, but people should not be," he said in a conversation about the results with the analysts.
Despite his criticism, Trump said he did not plan to replace Powell as head of the US central bank.
Trump is not the first president to deal with the Federal Reserve, an independent government agency. After leaving office, President George HW Bush blamed former Fed Chairman Alan Greenspan for not cutting rates fast enough in the early 1990s, a move Bush credits with have plunged the US economy into a recession. Presidents Richard Nixon and Lyndon B. Johnson also expressed dissatisfaction with the Fed's policies during their administrations.
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