This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

JPMorgan Well Prepared for Higher Rates, Dimon Says

NEW YORK (TheStreet) -- Borrowers should be ready for higher interest rates, as "rates are going to go up"JPMorgan Chase (JPM) Chairman and CEO said at a financial services conference hosted by Morgan Stanley on Tuesday.

But this does not have to be bad news, according to Dimon. While a "normalization" of rates after an extended period of record low interest rates might produce some "volatility," the important thing is that higher rates are accompanied by good circumstances.

If the economy is booming, more jobs are created and profitability is high, "no one is going to care," the CEO said. "I would prefer normalization in good circumstances sooner than later."

Dimon was speaking publicly for the first time since the annual shareholder meeting in May, when shareholders overwhelmingly voted against a proposal to split his dual role as Chairman and CEO>

He added that JPMorgan Chase is well positioned for a rise in interest rates. If the market yield on the 10-year U.S Treasury bonds were to move by 100 basis points, the bank would make an additional $2 billion, "all else being equal." The bank could make $5 billion more if rates were to move 300 basis points higher.

Dimon's outlook for the economy was largely positive. He maintained his view that Europe will remain a bit of a rollercoaster. In the US, corporations are in good shape, consumers are rapidly paying down their debt and "housing has turned the corner in every way shape and form."

The mortgage business should continue to do well despite rising interest rates, he said.

Rising interest rates had led to slightly lower refinancing volumes, but purchase mortgages has not been affected much. Moreover, the bank continues to see mortgage delinquencies decline at a rapid pace, resulting in more reserve releases.

The bank expects to release $1 billion in mortgage reserves in the second quarter. It is also likely to release a little ,more than $1 billion set aside for credit card losses as consumers are rapidly paying down their debt.

Shares of JPMorgan were down 1.2% at $53.71 in late afternoon trading.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,927.27 -33.30 -0.20%
S&P 500 1,973.79 -4.55 -0.23%
NASDAQ 4,431.2140 -18.35 -0.41%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs