JPMorgan CEO Declares Fed Rate Cuts Unlikely, Stablecoins Pose Zero Systemic Risk

Wall Street's most powerful banker just dropped a bombshell on monetary policy expectations.

THE NEW REALITY

Jamie Dimon's latest assessment torpedoes market hopes for near-term Fed easing. The banking titan sees persistent inflation forcing the central bank to maintain current rates through 2025—contrary to widespread investor speculation.

STABLECOINS: NOT THE BOOGEYMAN

While traditional finance remains cautious about crypto, Dimon delivered a surprising verdict on stablecoins. These digital assets don't threaten financial stability despite their explosive growth, according to JPMorgan's analysis.

The revelation comes as traditional institutions increasingly acknowledge crypto's staying power—even if they won't admit it in shareholder meetings.

Maybe banks are finally realizing that fighting decentralized innovation is like trying to stop the tide with a broom. The future's arriving whether they're ready or not.

Market expectations of Fed cuts

Dimon’s remarks contrast with market expectations, as some investors expect up to five rate cuts over the next year.

CME FedWatch data shows the market anticipates further modest cuts: 25 basis points in late October and another in early December. The Fed’s own projections indicate the possibility of two more cuts before the end of the year, with further cuts possible in 2026.

Meanwhile, US inflation data for August showed a 0.4% increase, bringing the year-over-year rate to 2.9%, above the Fed’s 2% target.

Impact on crypto markets

The lower interest rate is expected to boost the crypto markets. The first rate reduction of 2025 came as the Fed cut rates by 25 basis points, bringing the federal funds target range to 4.00%-4.25%. This move pushed Bitcoin above $117,500, a level not seen in over a month.

Both the crypto and finance communities are closely watching the U.S. Federal Reserve’s upcoming rate cut decision. BitMine Chairman Tom Lee said that if the Fed lowers rates, Bitcoin, Ethereum, the Nasdaq 100, and smaller companies could benefit the most.

Clear stablecoin guidelines needed 

On the topic of stablecoins, Dimon said he isn’t overly concerned about their impact on traditional banks. Still, he emphasized that financial institutions need to remain vigilant and understand the evolving space.

In the same interview, he said a stablecoin “if it’s like a mutual fund, probably needs rules like a mutual fund,” meaning it WOULD need clear guidelines and protections for investors. Unlike a traditional mutual fund, however, a JPMorgan-issued coin could pay interest, highlighting the different structure and oversight needed.

Dimon also pointed out that certain individuals or countries may prefer holding dollars through stablecoins rather than using banks. Banks, including JPMorgan, are looking into stablecoin projects and may join forces with other institutions to launch a shared token.

Also Read: Central Banks Could Hold bitcoin Like Gold by 2030: Deutsche Bank