More warnings of 8% interest rate

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More warnings of 8% interest rate

The boss of one of the world’s biggest banks has warned US interest rates could climb to 8%.

Jamie Dimon, the head of JPMorgan Chase, said his bank has prepared for interest rates to jump because of “persistent inflationary pressures”.

Central banks around the world have been busy raising rates in a bid to dampen rising prices.

But with US inflation gradually easing, the overwhelming expectation is for the Federal Reserve to cut rates this year.

Markets are pricing in two quarter-point rate cuts in 2024.

Mr Dimon’s comments come as US interest rates rest in the range of 5.25% to 5.5% – higher than they have been for more than 20 years.

By making borrowing more expensive, higher interest rates encourage saving and reduce borrowing for home purchases and business investments, cooling the economy and easing the pressures pushing up prices.