JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon repeated his warning about the need to prepare for higher Treasury yields, despite their retreat since he said last August they could surpass 5 percent.Absurd to think Congress survives with another near doubling of interest charges to over a trillion/yr. The voters will not do it. Dimon makes a crucial error about inflation, he cannot distinguish between real and fake inflation.
“People tend to forecast a little bit of a change, and sometimes it’s a huge inflection point which people almost never capture,” Dimon said Wednesday in an interview with Bloomberg Television in Beijing. “When I talk to my board, we’ve got to be able to handle 5 percent, 7 percent, 8 percent, 10 percent because you don’t know.”
JPMorgan instead will be prepared for the MMT moment, and his research staff has a handle on that since it is is theoretically assured. After MMT will will spike to 4%, but only on rare occasions, with the average rate on the ten year holding steady in the 2.1- 2.5 range. The counter inflation coming from endogenous banking gains. But when the rate spikes to 4%, the roll over consdequence is greately tamped because of the assigned defaults the Fed will execute over the 14 yer, renewable contract.
But, seriously. I have seen the research staff respond quite nicely to the sandbox concept, and they know what a Wienerized default process looks like, not bad.
No comments:
Post a Comment