JPMorgan Chase CEO Jamie Dimon warned on Monday about the risks posed by record U.S. deficits, tariffs, and rising international tensions. He spoke at his bank’s annual investor day in New York. Dimon said stock markets are not properly accounting for the potential of higher inflation and stagflation.
“We have huge deficits; we have what I consider almost complacent central banks,” Dimon said. “You all think they can manage all this. I don’t think they can,” he added.
“My own view is people feel pretty good because you haven’t seen effective tariffs,” Dimon noted. “The market came down 10%, and then back up 10%. That’s an extraordinary amount of complacency.”
Dimon’s remarks come after Moody’s downgraded the U.S. credit rating, citing concerns over the government’s growing debt burden.
Dimon warns of economic complacency
Recent market volatility is partly due to worries that President Trump’s trade policies will increase inflation and slow economic growth in the U.S.
Dimon also said Wall Street earnings estimates have already fallen due to uncertainties from trade policies and expects a further decline. “In six months, those projections will fall to 0% earnings growth after starting the year at around 12%,” Dimon predicted.
He thinks this drop in earning predictions will lead to lower stock prices. The chance of stagflation—a recession plus inflation— is “roughly double what the market thinks,” according to Dimon. Troy Rohrbaugh, a co-head of JPMorgan’s commercial and investment bank, said corporate clients are currently in a “wait-and-see” mode on acquisitions and other deals.
Investment banking revenue might drop by a “mid-teens” percentage in the second quarter compared to last year, although trading revenue was trending higher by a “mid-to-high” single-digit percentage, Rohrbaugh stated. On succession planning, Dimon repeated that his timeline for stepping down as CEO remains the same as previous statements. “If I’m here for four more years, and maybe two more” as executive chairman, Dimon noted, “that’s a long time.”
Marianne Lake, the Chief of Consumer Banking, also spoke at the investor meeting for a full hour, the longest time.
She is viewed as a top candidate to succeed Dimon, especially after the Chief Operating Officer said she would not pursue the top job.
