WHEN: Today, Thursday, February 23, 2023
WHERE: CNBC’s “Fast Money Halftime Report”
Following is the unofficial transcript of a CNBC exclusive interview with JPMorgan Chase Chairman & CEO Jamie Dimon on CNBC’s “Fast Money Halftime Report” (M-F, 12PM-1PM ET) today, Thursday, February 23rd. Following are links to video on CNBC.com:
More of Jim Cramer’s interview with Jamie Dimon will air on “Mad Money” tonight at 6PM ET. Transcript to follow the interview.
All references must be sourced to CNBC.
JIM CRAMER: Scotty, thank you for teeing me off. This is exactly what we want to start talking about which is serving the underserved, getting people in Philadelphia here at 52nd Street to have ownership. I saw you happier than I’ve ever seen you. You are a banker, a local banker at heart.
JAMIE DIMON: Exactly. People always think of us as big CEOs in corporate headquarters we do a lot of corporate business but the end of the day, we have branches and human beings that are run by human beings that you saw. They love their clients in that community branch we’re doing mortgages for low-income individuals. We’re doing small business advice, we bring in the whole community. It’s a fabulous concept that we’ve just really enjoyed doing it.
CRAMER: And this is replicable. You are doing it in another city, tough city like Baltimore.
DIMON: We have 15. I’ve been to like 12 of them so far. We also have 100 community managers so one of the special things here is we have a branch manager and a community manager who walks the street, meets some local businesses, the not to profits, the enterprise who is here works with the local institutions, brings them in. We have we’ve had 60 events there to educate the local population about small business, getting a mortgage, saving money, things like that. So they’ve been a huge success, and we’re just really proud of them. Oh and they’re hell of a lot of fun to go do.
CRAMER: Well, the cynics would say you’re just doing this because of political you’re doing it because you want to look good in Washington. That’s that when I saw I saw guys actually bankers gonna make money off the neighborhood because the neighborhood is going to do well.
DIMON: The cynics are terrible. They’re always—
CRAMER: They are terrible.
DIMON: We serve people. We serve people every day that that branch is so we want every branch manager walking in like that. You saw the story about the one person who got the mortgage and lived there for 25 years.
CRAMER: Dynamite.
DIMON: And the woman’s whose name I don’t remember the mortgage loan officer who called him every day to get him through the process, how proud he is to own a home now. And he was telling his son that we own this home. So you know that yeah, that moves. It’s one person but that bends the curve right there.
CRAMER: Okay so when we hear that the mortgage business is tough, like Wells Fargo has laid off a lot of people. I didn’t see any of that today. I saw on a micro level, not what the what the Federal Reserve’s doing, not what the Fed’s fund rate is, but about what happens when you revitalize the neighborhood and you get an uplift in business in the whole town.
DIMON: That’s correct. There’s good evidence both anecdotal and we have some numbers to support that when you have a branch there that you have local businesses move in you have a home be sold that changes the value of things around around the area. We’ve done this now in DC, in Harlem and in Crenshaw, LA. Yeah, so these can these things can lift up the whole society. And the other thing which you may remember, we hire locally, the art is done locally, and if we bring in food, it’s local vendors. It was the place was reconstructed by a black construction company. So we and we, everything we do, we try to do local and it’s really a community branch and with local outreach, and they’ve been great.
CRAMER: So how do you join the real banker you are, community real banker with something like oh my god, we’re gonna have recessions so therefore, we’re in trouble, a Federal Reserve this, Fed rates Fed funds rate that. These don’t seem to work together. Are there two economies the economy that we obsess about, and the economy that is creating a great wealth in this area?
DIMON: Yeah, I mean, I basically run the company. I know that there’s the economy can go up or down. We don’t run it that way. We do it this way. We build branches. We hire people, we train people, we build technology, and we basically do it through thick or thin. And even even more than that, I want to be helping this community regardless of the environment. We will be there for clients regardless of the environment. Yes, we all talk about the economy, you guess about it, but we manage through it, and we try to make sure we can handle whatever it throws at us which is often different than you expect.
CRAMER: But a $3 trillion base here, which is just incredible, largest in the world. So I know you have to worry about recession, over the big panoply that you have. Do you tell people listen, batten down?
DIMON: I tell people not really. Yes, uncertain things. But for the most part, no, but we always have a recession playbook where you might do a certain credit—
CRAMER: Well, are you breaking it out right here?
DIMON: Say it again?
CRAMER: Are you breaking out the recession playbook right now.
DIMON: Not really. Right now the U.S. economy, this is the contradiction here.
CRAMER: Okay.
DIMON: The U.S. economy right now is doing quite well. Consumers have a lot of money. They’re spending it, jobs are plentiful. I think it’s fabulous by the way that wages are going up for the low end. So I get a lot of complaints from CEOs about this—
CRAMER: But that’s inflationary.
DIMON: But they haven’t had a pay raise for 20 years. And so you know, here our minimum wage is something like the 40th percentile of all Americans and they get mental, dental and medical and things like that. But it’s wonderful. That’s, that’s today. Out in front of us, there’s some scary stuff and you and I know there’s always uncertainty. That’s that’s a normal thing. This uncertainty is a little bit more than that.
CRAMER: When you think about this, for a long time, we say well, the Fed’s behind the curve, now we say they’re ahead of the curve, maybe they’re gonna hurt us. I’m not hearing that we should obsess, maybe we are obsessing about every quarter point. Because you’ve been there when it’s 7,8. You’ve been there when it’s 10. You’ve been there when it’s 13. You still did your business.
DIMON: Yeah, we will be fine regardless of the interest rates out there and we prepare, and we’re prepared to handle the fat tails, not the ones you expect the ones you don’t expect because you want that from me. You want JPMorgan Chase to be a strong entity regardless of the environment. And like I said, I want to serve the client regardless of the environment so I think look, the Fed will do what it has to do it’s kind of caught up. They’re gonna pause we all know that for a while they should. It may not be enough and so I think—
CRAMER: But the 2% inflation, are you there for that?
DIMON: I think it’ll take a while. I just don’t think it will come down enough—
CRAMER: So rates longer, higher and longer.
DIMON: Possibly.
CRAMER: Okay well you know that hurts, will that hurt lending, will it hurt what you’re trying to accomplish in 52nd Street in Philadelphia?
DIMON: All things being, it wouldn’t do anything with we are doing here. It won’t change our plans at all. All things being equal might be slightly worse than the economy. Still there’s still a chance for a soft landing. I mean, I wouldn’t take if off the list of possibilities.
CRAMER: Okay now across the street from this bank is a check, check cashing. We know that they’re also AI lending, we know there’s buy now, pay later. There’s a lot of people trying to reinvent things. Maybe it’s phony tech, bank versus what I know you might think of as phony tech. Where are you?
DIMON: It’s not I mean, AI is real like we use we already use AI, machine learning natural language processing in 300 cases. And we do it to reduce risk, fraud, marketing. When we move money around the world, it’s run through OFAC systems, sanction systems, risk systems. It also uses AI to make sure is this abnormal, is it a bad pattern? We use voice recognition we have tons of things to stop the—
CRAMER: Well, it’s not you. Remember what Jensen Huang said from NVIDIA, hey, you’re doing I know you’re doing machine learning logic and it’s working for you.
DIMON: That’s correct. But, but I would say to everyone out there it is still at the early stages. This is this is this is real. This is a dramatic change and people just get really geared up for how you can use AI for good. Remember it can be used for bad so there’s a little bit of an arms race, and the bad guy is going to use it too and you just have to keep that in mind.
CRAMER: Alright, so I mean, look, it’s in the news today. You guys issued JPMorgan. This was the same thing when I was a homicide reporter used to spring on people. It’s very, it’s my, I’m going back for 40 years. JPMorgan admits Jes Staley had inappropriate contact with Jeffrey Epstein. It’s you guys saying this. How come the AI doesn’t catch stuff like that?
DIMON: Probably would have. But I think I think basically, I can’t talk about the specific litigation.
CRAMER: Right. Is this the end of it?
DIMON: It’s just we have an extraordinary amount of risk, legal, control people, a lot of them come out of the DOJ, the Attorney Generals who know what they’re doing who have to make judgment calls and hopefully, hopefully make the good ones.
CRAMER: Okay, so let’s talk about what I need you to talk about what is I have to regard as the banker I saw today versus the things I read from you. And I say that because sometimes I lose hope when I hear you. And then sometimes like this morning when I see you smile, see you congratulate people talk about even in somewhat expletive deleted way how exciting it is. How do you, I’m having trouble Jamie with the one that is saying listen, there’s a lot of gloom you gotta get together with the one that says there’s a lot of good things happening.
DIMON: They’re both a little true. I love seeing our people and seeing our clients getting out in the road and you learn something every day. I heard of the woman who made that mortgage. I mean literally, it just it warms my heart and so it’s about just put this in perspective, economy is good today. There’s always uncertainty but it’s heightened now. It’s heightened because of QT, Russia, Ukraine, oil, gas, more migration, trade, China, and that’s a rational thing, but then put out here what I really feel, America is the most prosperous nation on the planet. We have all the food and energy we need. We have enormous innovation. We’re gonna get through everything.
CRAMER: Called in January for a Marshall Plan for food and energy. Why do we need a Marshall Plan when we got what we need.
DIMON: For the world because—
CRAMER: You said America always has to be put first.
DIMON: Yes, but I think America first America has to help if you don’t have American leadership around the world I mean, mature, polite, diplomatic, it can’t be our way the highway. If you don’t have it, you’re gonna have chaos. The only the only one who can lead is America. I’m not saying that because I’m being arrogant—
CRAMER: No.
DIMON: It’s the military, economic and capabilities that and so—
CRAMER: But at the same time in the same breath, you said in your January piece, don’t forget FDR and Churchill made common cause with Stalin one of the worst detailing years of our lifetime to defeat Hitler. At the same point, you talk about maybe we need to have allies that common cause allies just on this issue. I read your piece of saying maybe we got to go to China and defeat Putin together.
DIMON: I don’t think we can do that.
CRAMER: Why not?
DIMON: I think the real point is American leadership, real politic, this is not worrying about not real, real politic, which is my reference to Stalin and that we’ve got to make sure our allies are safe, and that they want to trade with us and they want to ally with us and stuff like that, which is diplomatic, but oil and gas. You see what it could have done to Europe. It’s already hurting a lot of poor nations, it’s hurting poor people, governments have to basically subsidize it even more. So I’m trying to make the point is that if we don’t get affordable, reasonable, secure energy, it will be bad for the world and by the way, is gonna be bad for CO2 because you see countries around the world turning back on their coal plants. So I’m making the argument we need a comprehensive strategy to make sure we get through this and make the world safe for democracy for the next 100 years.
CRAMER: Alright, so let’s just go back to what the juxtaposition. I saw people today who are going to be empowered, the neighborhood, I know that there’s a 50% lift. We went to 9 and 19th which is an even tougher area so to speak going back a few years ago. I look at all this and then I think about okay, so I need to worry about Jay Powell and you worry about the Fed. There’s something wrong here. There’s something wrong because maybe that’s too short a term. Maybe what we’re thinking about when we talk we’re talking about the Fed is not what is happening boots on the ground here.
DIMON: Yeah, I think they’re different. I mean, the Fed look, I have all the respect for Jay Powell. But the fact is, we lost a little bit of control of inflation, models didn’t pick that up. I’ve always been suspicious of models, and when using them extensively, I would say use a little bit of judgment too. And there’s been a seat change. Governments have borrowing a lot of money and you got to incorporate that what’s taken place that means they’re spending it that’s inflationary. Wages, we haven’t, we’ve seen come down but not so much. Oil and gas will probably be going up because, you know, the investment has been curtailed. And, you know, the green environment, green economy, close to $4 trillion a year of additional spending. So you talk and the IRA Act, which I think has a lot of good stuff in it. The Infrastructure Act, this is huge money. And so you know me, you’ve got to see change. And I think we shall get adjusted to that. And yeah, we’ll have more normalization interest rates, and we’ll be fine. Just remember America’s the most prosperous place on the planet. We’ll be fine.
CRAMER: Okay, but I don’t I know that area very well. My family’s been here for 175 years. That area has not had vibrancy for 65 years. Are you telling me that government did anything to that area? We talked about the government this government that, the government did nothing for that area. That’s why that area is so under banked and the people are poor and they shouldn’t be. JPMorgan is more important than the government when it comes to that area. Why talk about the government so much? You’re the business, business is the greatest source for social change.
DIMON: I totally agree. But we need good government policy and we got to do it in collaboration. So we’re doing a lot of collaboration there. The mayor was there.
CRAMER: Yes, it was great.
DIMON: You need zoning laws changed, you need inner city schools to teach kids—
CRAMER: And your people will do that? Your branch will do that?
DIMON: We try to do all of that, we try to get kids jobs we got rid of, we’re hiring ex-felons now we’re we got rid of college degree required were necessary, but we need government to do to change the mortgage laws to make them more affordable to people. We need government to do a better job in inner city school education. We need government do a better job with the zoning laws about for affordable housing. So in collaboration, you can lift up that neighborhood, and you’re absolutely correct. A lot of government rules regulation requires, they completely backfire. They have the total adverse consequences to what they were intended to do, but they don’t change them. So we need government to be a little more reactive.
CRAMER: We do need government. Now we’re talking to Jamie Dimon, Chairman & CEO of JPMorgan Chase. I’m so glad that Scott Wapner gave us a chance. We are going to be back with you later on “Mad Money.” Thank you so much.
DIMON: You’re very welcome.
