JPMorgan, a worldwide banking giant, has been sitting on nearly half a trillion dollars with the anticipation that interest rates will rise in the coming months. This presents a tremendous investing opportunity as opposed to purchasing Treasury bonds or other securities.
Chief executive Jamie Dimon later explained during the Morgan Stanley U.S. Financial Services conference on Monday, “We do expect rates to stay low for a bit longer; the Fed has told us that. But “if you look at our balance sheet, we have like $500 billion in cash and we’ve actually been stockpiling more and more cash waiting for [an] opportunity to invest in higher rates.”
This approach sets up the bank to “benefit from rising rates both from the short end and the long run and long rates,” he said, adding that it will hinge “on the decision we make over the next six to nine months. But I do expect you are going to see higher rates and more inflation today.”
Equity markets are showing volatility with the public waiting for the Federal Reserve meeting on Wednesday for policy update on review of recent surges in inflation but also the weak job numbers reported in the previous week.
Stocks closed red with the Dow Jones recovering from a session low of -250 points to -85 points. The Nasdaq closed green at a session high of +130 points.