JPM's Dimon: Fed Should Raise Interest Rates 'Sooner Rather Than Later'

WASHINGTON -- J.P. Morgan Chase & Co. Chairman and Chief Executive Officer James Dimon said he favors increasing interest rates and that the Federal Reserve should act "sooner rather than later."

"The Fed has to maintain credibility," he said Monday, speaking at the Economic Club of Washington, D.C. "And I think it's time to raise rates."

The comments come as the interest-rate-setting Federal Open Market Committee is set to meet next week. The policy makers are likely to discuss whether to raise their benchmark federal-funds rate from its current range of between 0.25% and 0.50%. They have held it steady since lifting the band by a quarter percentage point in December.

"Return to normality is a good thing, not a bad thing," Mr. Dimon said. "Twenty-five basis points is a drop in the bucket."

In the past, Mr. Dimon has said he is concerned about rates rising faster than people expect. A slow, steady increase in rates, though, would be good for his and other banks. That is because it would increase the amount of profit they can make by lending money, but also because rising rates would indicate that the economy is getting stronger.

"If we ever get a little more consumer and business confidence, that would increase the demand for credit, as well as reduce the incentive and desire of certain investors to buy U.S. Treasuries," he said in his April 2016 shareholder letter. "If this scenario were to happen with interest rates on 10-year Treasuries on the rise, the result is unlikely to be as smooth as we all might hope for."

Mr. Dimon, who was interviewed by Carlyle Group co-founder David Rubenstein, suggested he was frustrated by U.S. policy makers, referring at one point to "Democratic, Republican bullshit."

But Mr. Dimon, who is 60 years old, ruled out becoming a politician. Asked if he ever considered running for office, Mr. Dimon said, "I would love to be president of the United States of America." But he quickly added, "I just think it's too hard and too late."

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