JPMorgan CEO Jamie Dimon has long been skeptical about the Federal Reserve’s ability to bring inflation down, but he nevertheless supported the central bank’s jumbo-sized rate cut in September.

In a recent interview with Bloomberg TV, Dimon was asked if he thought the Fed’s 0.5% rate cut was a mistake.

“No, actually,” he responded. “Inflation has definitely been coming down, they don’t want to go into a recession. Unemployment has been going up.”

Dimon, seemingly speaking from both sides of his mouth, recently warned that the biggest risk facing the U.S. economy was stagflation—a doomsday scenario characterized by high inflation, weak growth, and high unemployment.

If persistently high inflation is accompanied by weak economic growth, conventional central bank policy might not be enough to fix the problem—something Dimon has already acknowledged.

Yet, he still backs the Fed’s current strategy.

“They were late raising rates but they raised very high, rapidly, to 5% which I think is the right thing,” said Dimon. “And they’re right to take the foot off the gas on that one.”

Dimon’s comments highlight the central bank’s challenge. Policymakers are under enormous pressure to engineer a “soft landing” for the economy while putting the inflation genie back in the bottle.

While economists disagree about whether the Fed can pull it off, there’s a growing consensus that policymakers need to tread carefully after their shock-and-awe approach in September.

Slow and steady from here

With the power of hindsight, the Fed probably wouldn’t have cut rates so aggressively in September, said David Roche, the founder of Quantum Strategy.

This is because the September nonfarm payrolls report, which showed that employers added 254,000 workers to payrolls, made the Fed’s “jumbo interest rate cut look silly, populist, and panicky.”

Moving forward, there should be “no more jumbo cuts [...] unless something real bad happens,” said Roche.

Jeremy Goff, a managing director at Palmer Square Capital Management, said policymakers may soon regret their rate cut if inflation data surprises to the upside.

“If CPI is hot — or hotter than expected — the Fed has some work to do, to make sure we land the right way,” said Goff.

Goff’s concerns are shared by BlackRock strategists Wei Li, Catherine Kress, and Christian Olinger. They recently argued that “inflation will prove sticky and could surprise the Fed again as it did earlier this year.”

If this happens, the Fed may once again find itself at odds with the consensus, which will only invite more criticism from Wall Street and Main Street.

In the meantime, Fed officials have assured markets that “there will be a lot of rate cuts” over the next 12 months.

In a recent interview with Fox Business, Chicago Fed Bank President Austan Goolsbee said the Fed is trying to “get the rates down to normal,” which could take “over a year or more.”

The Fed is widely expected to cut interest rates again at its final two policy meetings of the year in November and December.

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