Jamie Dimon warns Trump attacks on US Federal Reserve could boost inflation

JPMorgan Chase chief Jamie Dimon has warned that the Trump administration’s attacks on the Federal Reserve could backfire and push borrowing costs and inflation higher.

Dimon said he had “enormous respect for Jay Powell the man” and was a strong supporter of Fed independence.

“Anything chips away at that is probably not a great idea,” Dimon told reporters on a call for JPMorgan Chase’s fourth-quarter results. “And in my view, it will have the reverse consequence. It will raise inflation expectations and probably increase rates over time.”

[ Jerome Powell stands his ground amid Trump’s attack on Federal ReserveOpens in new window ]

The comments from Dimon, one of the most influential executives on Wall Street, come just days after Powell said he was the subject of a criminal investigation by Donald Trump’s Department of Justice. Global central bank chiefs had also said on Tuesday that they “stand in full solidarity” with Powell, while former Fed bosses and even some members of Trump’s Republican Party condemned the DoJ’s probe.

“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” said a statement from 11 top central bankers, including European Central Bank president Christine Lagarde and Bank of England governor Andrew Bailey.

JPMorgan chief financial officer Jeremy Barnum echoed Dimon’s warning, saying “the larger question is damage to American economic prospects and frankly global economic stability”.

Robin Vince, chief executive of US bank BNY, also said on Tuesday that eroding the Fed’s independence ran counter to the Trump administration’s hopes of improving affordability for consumers.

“Questioning one of the tenets that underlies the bond market runs the risk of actually doing the opposite of that and actually pushing up interest rates because the market potentially has to worry about something that frankly, they shouldn’t have to worry about,” he said.

Despite the worries over the Fed, Dimon struck an upbeat tone on the US economy, saying it “has remained resilient” and that while the labour market had softened, “conditions do not appear to be worsening”.

JPMorgan’s profits fell 7 per cent in the final quarter of 2025 after an unexpected drop in investment banking revenues and an increase in the reserves set aside for possible loan losses.

The largest US bank by assets reported net income of $13 billion (€11.2 billion) for the quarter on Tuesday, just ahead of analysts’ estimates for $12.8 billion but down from $14 billion a year ago.

Investment banking fees dropped 5 per cent to $2.3 billion in the period, falling short of analysts’ estimates for a modest rise to about $2.6 billion.

JPMorgan’s debt underwriting business, in particular, underperformed, with revenues falling 2.5 per cent compared with forecasts of an almost 20 per cent increase.

“Our performance was not what we would have liked and you can be assured that we’re looking at that,” Barnum said of the quarter for investment banking.

Investors have been anticipating that Wall Street is at the start of a revival in deal making activity after a three-year hiatus.

Although JPMorgan’s investment bankers fell short of expectations, its traders fared better. Equities traders brought in $2.9 billion in revenues, up 39 per cent, while revenues from fixed-income trading rose 7.5 per cent to $5.4 billion.

The bank’s results were also hit by $2.2 billion of provisions for possible credit losses tied to JPMorgan’s agreement to take over Apple’s credit card portfolio from Goldman Sachs.

Barnum said a 10 per cent cap on interest rates on credit card loans would reduce the supply of credit for consumers instead of lowering borrowing costs, and would not rule out a potential legal challenge going forward.

“If you wind up with weakly supported directives to radically change our business that aren’t justified, you have to assume that everything’s on the table,” Barnum said.

JPMorgan reported full-year net income of $57 billion, down 2 per cent from 2024 but still the second straight year when the bank has generated more than $1 billion a week in profits.

JPMorgan shares were down about 3 per cent in early trading in New York on Tuesday.

Copyright The Financial Times Limited 2026