JP Morgan CEO Jamie Dimon He reportedly said that everyone needs to be prepared for higher interest rates and noted this Lending is already becoming scarcer.

“You’re already seeing credit tightening because you know the easiest way for a bank to keep capital is not to take on the next loan. So I think you will see that. And I think everyone should be prepared for rising interest rates from here,” Dimon said during his speech at the bank’s investor conference Video posted by Bloomberg.

“You should be prepared for 6-7(%),” he added.

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Although the stock market still reflects optimism, continued rate hikes are due to the Federal Reserve And the ongoing debt ceiling crisis has hurt government bond yields.

The central bank’s tightening cycle may not be over yet, and if it continues to hike rates, government bond yields are expected to reflect that rise. Even if the debt ceiling crisis is resolved, the expected high level of borrowing by the Ministry of Finance will result in a significant amount of Treasury bills entering the market over the next few months, This increases returns even further.

The iShares 1-3 year Treasury Bond ETF SHY and the Vanguard Short-Term Treasury Index Fund ETF VGSH lost over 0.4% in the last five days, according to Benzinga Pro.

“The Fed doesn’t control the five-year or ten-year interest rate, it controls the federal funds rate. So even though she raised the call money rate, there’s still too much liquidity in the system, which is why stocks are high…” Dimon called.

Despite the crisis, S&P 500 and the Nasdaq Composite are currently trending near their high in nine months. The SPDR S&P 500 ETF Trust SPY gained 1.67% over the past five days, while the Invesco QQQ Trust Series 1 QQQ up 3.52%, according to Benzinga Pro.

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