He said, "I think rates are probably going to go higher than 5% ... because I think there's a lot of underlying inflation, which won't go away so quickly," on CNBC's "Squawk Box" from the World Economic Forum in Davos, Switzerland.
Fed Raises Benchmark Interest Rate to Combat Inflation
To combat soaring prices, the Federal Reserve has raised its benchmark interest rate to a targeted range between 4.25% and 4.5%, the highest level in 15 years. At its December meeting, the anticipated "terminal rate," or the point where officials expect to end the rate hikes, was set at 5.1%.
Dimon Attributes Recent Inflation Decrease to Temporary Factors
Dimon said the recent decrease in inflation is due to temporary factors such as a pullback in oil prices and a slowdown in China due to the Covid pandemic. He added, "I think oil gas prices probably go up the next ten years... China isn't going to be deflationary anymore."
Rate Hikes Fuel Recession Worries
The series of aggressive rate hikes have fueled worries about a recession in the U.S. However, central bankers still feel they have leeway to raise rates as the labor market, and the consumer remain strong. The JPMorgan chief said if the U.S. suffers a mild recession, interest rates will rise to 6%. He added that it's hard for anyone to predict economic downturns.