J.P. Morgan Chase CEO Jamie Dimon reaffirmed the forward momentum of the current bull market as he cited that the economy will sustain its fortuitous path of growth without any obstructions ahead.
“In America, the economy is quite strong. It’s growing at 3 percent. And it has been now for a couple of quarters,” said Dimon. “There are no great potholes. So that may very well continue.”
Since the installment of U.S. President Donald Trump’s administration, the country’s gross domestic product has grown by an average of 2.7% per quarter. Furthermore, the final estimate for second-quarter GDP is expected to show a revision of 4.3% growth, while the third quarter growth is forecasted to come in around 3.3%.
Dimon’s comments come as the Federal Open Market Committee is scheduled to meet this week to decide on what will most likely be another interest rate hike in 2018–possibly the third of the year. The general consensus based on the latest Fedspeak is that the central bank will continue with an upward, steady rate hike backed by positive economic data in conjunction with a strong stock market that has seen the S&P 500 reach record levels.
Related: Dimon’s 5% Yield Warning ‘Perfectly Reasonable’
One possible factor that could derail a potential rate hike is the trade wars, particularly between the United States and China. The Trump administration announced it would be moving forward with imposing a 10% tariff on $200 billion worth of Chinese goods that includes a step-up increase to 25% by the end of the year.
Less than 24 hours later, Beijing announced it will impose $60 billion worth of tariffs on U.S. goods beginning on Sept. 24.
“The president raised very, very good issues (on China),” said Dimon, but also said tariffs are “not a great way to go about it” as they “could easily offset some of the benefits from regulatory reform and tax reform.”
For more trends in fixed income, visit the Fixed Income Channel.