Markets

Dimon says Fed will likely still hike rates in December despite market turmoil

Key Points
  • J.P. Morgan CEO Jamie Dimon says the Fed will "stay on course" by raising rates in December. 
  • "The fact is, it's a strong economy and normalizing rates is a good thing — they will do December," Dimon said in an interview with CNBC's Becky Quick. 
  • Futures markets Thursday pointed to a 68 percent probability of a rate increase before 2018 ends. 
Fed runs the risk of doing 'too little, too slow,' says JP Morgan CEO
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Fed runs the risk of doing 'too little, too slow,' says JP Morgan CEO

Despite the stock market sell-off this week, J.P. Morgan Chase CEO Jamie Dimon predicts the Federal Reserve will likely still raise interest rates in December.

"The fact is, it's a strong economy and normalizing rates is a good thing — they will do December," Dimon said in an interview with CNBC's Becky Quick Thursday.

Dimon, who was in Washington at the Business Roundtable's CEO Innovation Summit, said the central bank will "stay on course."

"The world will be much happier if America's growing and rates go up a little bit than if we have a recession and rates go down," Dimon said. "It's better for the world."

While some investors are less optimistic on areas like mortgages and auto sales, Dimon said those areas are "humming along" and that any weakness there would have a minor total effect on the U.S. economy.

At their latest meeting, Fed officials teed up a December rate hike. But also signaled some hesitation about how trade tensions and corporate debt could impact growth.

Minutes released Thursday from the November meeting of the Federal Open Market Committee, which sets interest rates, pointed toward the strong likelihood of another quarter-point adjustment in the central bank's benchmark rate target in December.

Amid the latest round of market turmoil this week, the market lowered the probability of an interest rate hike when the central bank's policymaking body meets this month. Futures markets Thursday pointed to a 68 percent probability of an increase before 2018 ends, the lowest chance since late August. Markets also reduced the chances of future increases.

— CNBC's Jeff Cox contributed to this report.