JP Morgan Chase CEO Jamie Dimon sounded an upbeat note on the U.S. economy and sees the potential for U.S. Treasury yields to rise to as high as 4% if the Fed is forced to raise short-term rates more than anticipated. According to Dimon, as long as rates climbed because the U.S. economy was in good health, the move would amount to “normalization”, and would not be debilitating.
In a note of caution, however, Dimon also notes the potential for higher rates due to rising budget deficits in the U.S., and cutbacks in bond purchases from central banks around the world. Dimon said central bank activity around the world may cause more volatility and higher rates in a way we don’t fully understand, given the unprecedented nature of Quantitative Easing.
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