In reaction to the Fitch Ratings downgrade, the JPMorgan CEO said that “it doesn’t really matter that much”.
JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon has reacted to the Fitch Ratings downgrade of the United States’ long-term credit rating. Credit rating agency Fitch Ratings recently downgraded the US long-term foreign-currency issuer default rating from AAA to AA+. The capital market company issued a release to announce the development, noting that the Country Ceiling has been affirmed at ‘AAA’.
According to the rating agency, the downgrade signified the fiscal decline expected over the next three years. It also shows the high and increasing general government debt burden and the “erosion of governance reactive to ‘AA’ and ‘AAA-rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”
Fitch is of the opinion that governance standards have been gradually deteriorating for the past 20 years. The team mentioned other factors, like the repeated debt-limited political standoffs, lack of minimum-term fiscal framework, and more, as reasons for the steady deterioration in governance standards, which led to the downgrade.
JPMorgan CEO Says Fitch Ratings US Downgrade Is ‘Ridiculous’
In reaction to the Fitch Ratings downgrade, the JPMorgan CEO said that “it doesn’t really matter that much.” Speaking to CNBC, Dimon emphasized the fact that rating agencies do not have power over borrowing costs. Rather, he said, the market determines borrowing costs. Additionally, he said it is “ridiculous” that other countries have higher credit ratings than the US. In his opinion, other countries depend on the United State’s stability and military, which is why it is surprising that other countries are rated higher.
“To have them be triple-A and not America is kind of ridiculous. It’s still the most prosperous nation on the planet.”
As Congress met concerning the debt ceiling and put the country to near-default in May, the rating agency placed the US rating on watch. As for Dimon, getting rid of the debt ceiling is crucial.
In addition to stating his stance on the Fitch Ratings downgrade, the JPMorgan executive also talked about the buzzing AI trend, bank regulations, geopolitics, and the US economy. He belongs to the school of thought that supports the adoption of artificial intelligence. Dimon specifically said these technological tools, such as ChatGPT, are game changers that could help future generations. However, he warned that its use should be in the proper manner as “bad guys” are already taking advantage.”
JPMorgan has been amassing gains for the past year, increasing over 38% in the last twelve months. The company has added 15.88% since the beginning of the year and surged more than 15% in the last three months. Over the past month, JPM increased 8.51%.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
