(Bloomberg) -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the dislocation seen in U.S. money markets this week isn't a significant problem -- and won't be particularly troubling unless the economy weakens.
“I don't think it's a big deal we have dislocations. But it happened in very good times,” Dimon said Wednesday at a Business Roundtable press conference in Washington. “Those kinds of dislocations, in really bad times, will be far more dramatic than we think.”
The Federal Reserve on Wednesday injected $75 billion into U.S. money markets as policy makers' benchmark rate broke outside their preferred range, after adding $53.2 billion Tuesday. The moves helped send the rate for general collateral repurchase agreements down to 2.175% from the record high of 10% reached Tuesday.
“Banks have a tremendous amount of liquidity, but also have a tremendous amount of restraints on how they use that liquidity,” Dimon said. “We think the Fed did exactly the right thing.”
Read more: Fed injects liquidity into markets as key rate busts through cap
At the wide-ranging press briefing, Dimon also addressed other issues facing the economy:
- Negative interest rates for the U.S. -- advocated by some leaders, including President Donald Trump -- are a “really bad idea,” Dimon said. “I don't think it's worked around the world. It has adverse consequences that we don't understand, not just in the short run -- 10 years after the fact.”
- While “a recession will come,” Dimon said that “my own gut tells me it's not imminent.”
- Dimon said that while taxes on the wealthy have never been an effective tool in the past, he is OK with paying more himself.
To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Steve Dickson
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