Super investors switch to cash amid inflation concerns | Financial

Dimon, who is seen as one of the most powerful banking executives on Wall Street, told CNBC that his JPMorgan is no longer extra for that reason. treasuries, will buy the well-funded 10-year US Treasury bonds. Those loans offer insufficient support in the event of inflation, according to the CEO of the bank with a market value of $387 billion.

There’s a good chance that inflation, which already climbed to 5% in the United States last month, “isn’t temporary,” he said. This inflation will be able to continue solidly into 2022.

Certainly in the coming months, interest rates will not rise enormously, according to Dimon, but the period after that will, and then JPMorgan Chase wants to be ready to buy bonds on much more favorable terms.

Lower income

The low market interest rate is biting banks in the tail. JPMorgan foresees a sharp decline in fixed income income such as bonds to $52.5 billion this year. Previously, it was estimated at more than $55 billion.

JPMorgan is an authoritative financial services company, but certainly not the only investment bank that foresees inflation to last longer than the central banks predicted in recent months. In the Netherlands too, institutional investors more often opt for holding cash.

The Federal Reserve will report on Wednesday evening how the US economy is growing, and whether it will make an adjustment to its bond purchase policy.

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