Jamie Dimon: Only 5% of everyday Americans probably know about the Fed's historic interest-rate cut

By Steve Gelsi

JPMorgan Chase CEO Jamie Dimon suggests the half-point interest-rate cut is 'a minor thing' that Wall Street - not Main Street - is obsessing over

'[The rate cut is] a minor kind of thing. ... There are 320 million Americans, and if you surveyed them, only 5% would know about it.' JPMorgan Chase CEO Jamie Dimon on the Federal Reserve's interest-rate cut this week

That was JPMorgan Chase CEO Jamie Dimon suggesting that while Wall Street has obsessed over the Federal Reserve's 50-basis-point interest-rate cut this week, it's not top of mind for most Americans.

The rate cut won't affect the outcome of the U.S. presidential election, Dimon said on Friday at the Atlantic Festival, which run by the Atlantic Monthly magazine in Washington, D.C. He said that mortgage rates had already started coming down ahead of the Fed's decision on Wednesday. And he estimated that only about 5% of U.S. residents are even aware of the rate cut.

A person familiar with the bank told MarketWatch that Dimon's point was that "everyday Americans are not tracking the Fed's decisions. Instead, we need to focus on the real economy longer term and how Americans are spending, saving, etc."

Many Americans are aware of the Fed's existence, at least: A recent Pew Research Center survey found that 45% have a favorable view of the U.S. central banking system, while 32% have an unfavorable view and 23% are not sure.

Regardless of whether most Americans heard the news about this week's interest-rate cut of 50 basis points or not, the Fed's plan to continue cutting rates to tame inflation will eventually affect their finances, by lowering the interest rates on their savings accounts as well as reducing the borrowing costs for car loans, mortgages and credit cards.

Also read: When the interest-rate cut will hit your mortgage, car loan, credit-card bills and savings accounts

A recent NerdWallet poll found that 61% of Americans expect to take financial action once interest rates go down, such as buying a car or refinancing a loan. And lower lending rates are expected to bring fresh life into the sluggish housing market, following a period in which high mortgage rates and record-high home prices have shut many buyers out. Many homeowners may also start thinking about whether to refinance their mortgages.

Read more: 3 ways the Fed interest-rate cut could jump-start buying and selling homes again

Dimon said he continues to doubt that long-term inflation will come down as much as others expect, due to a rise in military spending around the world, the costs of a moving to a greener economy and aging population trends around the world.

"I'm skeptical that inflation is going to go away easily," Dimon said. "There's a lot of things in the future that are inflationary."

Sticking to the themes in his annual shareholder letter as well as a column he wrote over the summer for the Washington Post, Dimon also said that he remains more worried about geopolitical risks posed by the wars in Ukraine and the Middle East than he is about inflation.

"I don't want to see a book in 20 years on how the West lost," Dimon said Friday, calling for an increase in U.S. military spending to help preserve democracy.

-Steve Gelsi

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09-21-24 0517ET

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