Jamie Dimon, the CEO of JPMorgan Chase, stated on Tuesday that former President Donald Trump's public criticisms of Federal Reserve Chair Jerome Powell are endangering the central bank's independence. Dimon warned these actions might have unintended consequences, potentially driving up interest rates and inflation over time.
During an earnings call, Dimon expressed "enormous respect" for Powell, who became the subject of a U.S. Department of Justice criminal investigation last Friday. The probe concerns alleged misuse of funds in a $2.5 billion renovation of the Fed's Washington, D.C., headquarters.
Powell has rejected the investigation, describing it as retaliation for not aligning interest rate decisions with the president's preferences. "Everyone we know believes in Fed independence," Dimon remarked. "And anything that chips away at that is probably not a great idea, and in my view, will have the reverse consequences. It'll raise inflation expectations and probably increase rates over time."
In response, ten central bank governors, including the Bank of England's Andrew Bailey and the European Central Bank's Christine Lagarde, issued a joint statement expressing "full solidarity" with Powell. Trump, who appointed Powell in 2018, has repeatedly criticized him for not reducing interest rates quickly enough.
Trump later defended his stance while traveling from Detroit to Washington. When asked by a reporter, he said, "Yeah, I think it's fine what I'm doing." He labeled Powell "a bad Fed person" who has "done a bad job" and reiterated his call for lower rates. Trump also commented on Dimon, suggesting, "Jamie Dimon probably wants higher rates. Maybe he makes more money that way."
Dimon's comments coincided with JPMorgan's release of fourth-quarter earnings, which showed a 7% profit decline to $13 billion. The drop was attributed to costs from acquiring a credit card partnership with Apple, previously held by Goldman Sachs.
This deal was announced shortly before Trump proposed a 10% cap on credit card interest rates, a move that has led to falling shares for major card providers. JPMorgan's chief financial officer, Jeremy Barnum, told analysts the bank is conducting "all the relevant contingency planning." He noted the credit card market is highly competitive and warned a cap could restrict credit access, particularly for those who need it most, negatively impacting consumers and the broader economy.
Barnum added that the lack of details on how such a cap would be implemented makes it difficult to assess its effect on JPMorgan's earnings.