JPMorgan’s Jamie Dimon Says It’s a Bad Idea to Interfere With the Fed

Ryan Knutson (0:00)

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Alex Ossola (0:22)

JP Morgan's CEO defends the Fed, warning that interference would push up rates. Plus, inflation holds steady at 2.7% in December. And President Trump tells Iranian protesters that, quote, help is on its way.

Alexander Ward (0:36)

We do know that officials are preparing just a lot of options for him. Whenever Trump is ready to make a decision on what he wants to do, things will move.

Alex Ossola (0:44)

It's Tuesday, January 13th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

On Wall Street today, JPMorgan Chase CEO Jamie Dimon defended the Federal Reserve after it was subpoenaed by the Justice Department. Dimon told reporters that anything that, quote, chips away at the Fed's independence was a bad idea and could have consequences like increasing inflation and interest rates over time. Dimon's comments came after JPMorgan reported its earnings for the fourth quarter. The bank said its profit fell 7 percent, dragged down by a $2.2 billion charge from its deal to take over the Apple credit card program and a surprising slip in investment banking fees. But it still saw revenue increase for both the quarter and the year. I'm joined now by WSJ reporter Alexander Saeedy, who covers banking and finance. Alex, I want to start with Dimon's comments about Fed Chair Jerome Powell and the Fed. Central banks around the world, former Fed and Treasury officials and several US lawmakers have spoken out this week defending Powell or expressing concern about the investigation into him. How much does Dimon's comment reflect the broader feeling on Wall Street in particular?

Alexander Saeedy (1:58)

Yeah, it's very representative of I think the view among executives in banks, hedge funds, asset managers that the independence of the Federal Reserve is a third rail, not something you want to interfere with because as we've seen in many countries around the world when politics become a factor in how central bankers set monetary policy, you lose trust from investors and that's exactly what has set America apart from a lot of other countries historically and that's what the stewards of these large financial institutions want to ensure remains. Without it, their ability to invest is curtailed. The appetite for investment goes down. So it's not surprising to hear Dimon come out swinging on this. And he was probably one of the first big Wall Street executives to speak out since the news of the subpoenas went public over the weekend.

Alex Ossola (2:57)

Shifting now to focus on what JPMorgan's earnings tell us about the consumer. On a call this morning, Dimon warned that there were big geopolitical risks, but overall he was upbeat about the state of the economy.

Jamie Dimon (3:08)

In the short run, called six months to nine months, even a year, you know, it's pretty positive. You know, consumers have money, they're still jobs even though it's weakened a little bit. There's a huge, there is a lot of stimulus coming from one big beautiful bill.

Alex Ossola (3:22)

Alex, what did JPMorgan's numbers tell us?

Alexander Saeedy (3:25)

JPMorgan's customer leans a little affluent. They're the biggest bank in the country, so they cover a lot of people. So there's a slight bias in what they report towards your sort of upper middle class segment. But overall, they were reporting really good credit metrics. You know, 90-day plus delinquencies were down versus a year ago on credit cards. Spending is up 7% year over year on debit and credit cards. And the bank executives were saying consumers are spending, they seem confident. Most income groups in the country seem to be improving or at least having more confidence, which is a little different from the alternative economic narrative of the very wealthy are doing well while those in lower income segments are doing worse, according to the executives. It seems like in general the trajectory is good.

Alex Ossola (4:15)

That was WSJ reporter Alexander Saeedy. Thanks Alex.

Alexander Saeedy (4:19)

Thank you.

Alex Ossola (4:23)

The latest government report on inflation shows that prices for goods and services rose 2.7% from a year ago in December. That's holding steady from a month earlier and in line with economists' expectations, even with the turbulence from tariffs. WSJ economics correspondent Harriet Torry said these numbers probably don't do much to change the Fed's calculus.

Harriet Torry (4:43)