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.