Jamie Dimon
It’s going to be scary out there in the markets until we reach a more normal interest rate environment. That was the message delivered by JPMorgan (JPM) CEO Jamie Dimon to delegates at the Fortune Global Forum in Chengdu, China on Thursday.
“It’s a different world when central banks are managing interest rates,” Dimon said, referring to the Federal Reserve’s orchestrated effort to keep long-term rates low. He reminded the audience that 10-year bond rateshaven’t been set by the Fed since World War II, and rates didn’t normalize until around 1950. “Until it gets back to normal [this time], it’s going to be scary and volatile.”
But Dimon emphasized that the long-term trend still looks positive, and that most people tend to overreact to the dramatic ups and downs in the market. It was a timely reminder, as the Dow Jones industrial average and the Nasdaq suffered their worst losses in two months on Wednesday. Dimon pointed out that the U.S. economy is still growing, albeit it not as fast as it should. In Europe, he said it remains to be seen what will happen, but he said the economic crisis there “could have been worse.”
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