Dimon's warning coincides with Freddie Mac showing a rate increase over the last week
The ongoing tug-of-war over the direction of mortgage rates for the remainder of 2025 continued on Thursday. JPMorgan Chase CEO Jamie Dimon cautioned that investors are downplaying the real possibility of higher interest rates.
Speaking in Dublin on Thursday at Ireland’s Department of Foreign Affairs, Dimon described the possibility of increasing interest rates as a "cause for concern."
Dimon’s speech coincides with news from Freddie Mac that the 30-year mortgage rate increased to 6.72% this week, up from 6.67% the previous week. The 30-year rate had declined for five weeks straight before this week’s increase.
The Federal Reserve decided last month to keep its benchmark interest rate steady, a move backed unanimously by its policymakers. At the time, Fed Chair Jerome Powell warned of persistent inflation pressures, which could worsen as a result of new U.S. import tariffs.
CME’s FedWatch, which tracks probabilities of changes to the Fed rate based on 30-day Fed Funds futures prices, only gives a 6.7% chance of a rate cut when the central bank meets again at the end of July. Currently, the market expects only two rate cuts for the remainder of 2025.
Chances of a rate hike
Dimon expressed that he views the likelihood of another rate hike as significantly higher than current market expectations.
"The market is pricing a 20% chance. I would price in a 40-50% chance," Dimon said. "I would put that as a cause for concern."
Eric Abramovich of Roc Capital, John Beacham of Toorak Capital Partners, and Glenn Tatham of Churchill Real Estate weighed in on Trump’s second term, citing rising tariffs, deportations, and uncertainty as growing headwinds for private lending. https://t.co/JgJ0yINA9J
— Mortgage Professional America Magazine (@MPAMagazineUS) July 10, 2025
He pointed to several factors, including ongoing tariff impacts, immigration policies, and the swelling federal deficit. He also highlighted global trade realignments and changing demographics as longer-term forces that could lead to inflation.
Dimon added that interpreting real-time economic indicators in the U.S. is "totally impossible to read," underscoring the uncertainty facing policymakers and investors alike.
Continued political pressure
President Donald Trump, meanwhile, has been pressing for sharp and immediate rate cuts, even urging Powell to step down.
“It’s OK with me. I think he’s terrible,” Trump said in response to a question about whether Congressional Republicans should investigate the Fed chair. “I call him ‘Too Late.’ He’s always late. But he wasn’t late with Biden before the election, he was cutting [rates] like crazy.”
FHFA director William J. Pulte has called for a Congressional investigation into Powell for political bias and “deceptive Senate testimony.” He posted a statement on his X account last week which laid out his accusations.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,’” Pulte said in the statement. “Jerome Powell’s $2.5B Building Renovation Scandal stinks to high heaven, and he lied when asked about the specifics before Congress. This is nothing short of malfeasance and is worthy of ‘for cause.’”
Polymarket shows a 16% chance that Trump will remove Powell before the end of the year, although the legality of such a move is questionable.
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