JPMorgan CEO Jamie Dimon calls Fitch U.S. downgrade ‘absurd’

JPMorgan CEO Jamie Dimon calls Fitch downgrade of U.S. credit 'ridiculous'

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The Fitch Ratings downgrade of the United States’ long-lasting credit score eventually does not matter, JPMorgan Chase CEO Jamie Dimon informed CNBC on Wednesday.

“It doesn’t really matter that much” since it’s the marketplace, not score firms, that identifies loaning expenses, Dimon informed CNBC’s Leslie Picker.

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Still, it’s “ridiculous” that other nations have greater credit rankings than the U.S. when they depend upon the stability produced by the U.S. and its military, Dimon included.

“To have them be triple-A and not America is kind of ridiculous,” Dimon stated. “It’s still the most prosperous nation on the planet, it’s the most secure nation on the planet.”

Fitch devalued the nation’s score to AA+ from AAA on Tuesday, indicating “expected fiscal deterioration over the next three years,” a disintegration of governance and a growing basic financial obligation concern.

The company put the U.S. score on watch in May after members of Congress butted heads over raising the financial obligation ceiling and brought the nation to near-default.

“We should get rid of the debt ceiling,” Dimon stated. “It’s used by both parties” in manner ins which plant unpredictability for markets, he stated.

Fed, A.I. and Ukraine

In the comprehensive interview, Dimon discussed subjects consisting of expert system, the U.S. economy, bank guideline and geopolitics.

He called expert system innovation such as ChatGPT “a game changer” that will likely assist future generations live longer, much better lives.

“It needs to be done right,” Dimon included. “I do worry about it because bad guys are going to use it too.”

The U.S. economy, he stated, is being supported by customer and organization strength, low joblessness and healthy balance sheets.

“It’s pretty good, even if we go into recession,” Dimon stated. “The storm cloud part is still there,” he included, describing a caution he offered in 2015 on the economy.

What concerns Dimon most are the geopolitical dangers produced by the Ukraine war and the Federal Reserve’s effort to check its balance sheet referred to as quantitative tightening up, he stated.

Consumer effect

Dimon berated regulators’ efforts to tighten up requirements on U.S. banks, stating the propositions revealed recently were “hugely disappointing.” At one point, he held up a chart revealing the web of regulators that banks handle.

Banks will be required to hold more capital as a cushion versus a range of dangers, which will impact customers, since the market will deliver more items to nonbank gamers, Dimon alerted. That’s what occurred in the U.S. home loan market, which is controlled by companies consisting of Rocket Mortgage

Part of the modifications include banks dropping internal threat designs for more standardized variations from the Federal Reserve.

“If I was the Fed, I’d be careful about saying their models are perfect,” Dimon stated. “Remember, their models didn’t show inflation and didn’t show 5% interest rates.”

Watch CNBC's full interview with JPMorgan's Jamie Dimon on Fitch downgrade, the Fed and regulations