Dimon: JPMorgan is sitting on about $500 million in cash, waiting to invest in higher rates

Banking big JPMorgan has been sitting down on about a fifty percent-billion-dollar stockpile of hard cash, waiting to devote in bigger prices in the coming months, as a substitute of purchasing Treasurys or other securities, Main Executive Jamie Dimon claimed Monday at a virtual banking convention.

“We do count on prices to stay small for a bit for a longer period the Fed has instructed us that,” Dimon, the longtime manager of JPMorgan Chase & Co.,
JPM,
-1.70%
said Monday at the Morgan Stanley U.S. Financial Companies Conference.

But “if you look at our stability sheet, we have like $500 million in money and we’ve actually been stockpiling much more and additional money ready for [an] opportunity to make investments in larger prices,” Dimon mentioned, in accordance to a transcript of the conference.

The program aims to posture the lender to “benefit from mounting rates both equally from the shorter end and the extended operate and long rates,” he explained, introducing that it will hinge “on the decision we make about the up coming six to nine months.”

“But I do hope you are likely to see increased rates and far more inflation these days.”

The produce on the 10-calendar year Treasury notice
TMUBMUSD10Y,
1.498%
rose about 3.7 basis points on Monday to 1.499%, very well off the 1.749% substantial for the 12 months strike in March, but nevertheless up about 60 basis factors on the 12 months, according to Dow Jones Industry Knowledge.

The Federal Reserve’s charge-environment gathers for two days this week, starting Tuesday, with traders awaiting a plan update Wednesday to see how the central lender is grappling with proof of surging inflation in new months, but also slack in the job sector for the duration of the COVID pandemic restoration.

Look at out: Inflation scare? Examine out this chart in advance of freaking out

Investors also will be listening to any hints of alter in phrases of the Fed’s outlook for prices and close to long term ideas for its monthly asset purchases, seen as a very first step to tightening its straightforward-financial stance.

Read: Paul Tudor Jones sees ‘green mild to guess intensely on each and every inflation trade’ if Fed ignores rate pressures Wednesday

The U.S. central lender at present purchases about $80 billion of Treasurys and $40 billion of mortgage-backed securities each and every thirty day period, while keeping benchmark desire rates involving % and .25%.

But when inflation has been shockingly hot, many economists and strategists expect the Fed to hold out until finally the slide to see how the labor sector responds to the inflation spike.

Read through: Really don’t be fooled by some of the hawkish appears coming out of the Fed this week

Shares were being combined Monday forward of the Fed update, with the Nasdaq Composite Index
COMP,
+.74%
in the vicinity of its history close, but with the S&P 500 index
SPX,
+.18%
and Dow Jones Industrial Common
DJIA,
-.25%
buying and selling reduced.