JPMorgan Chase CEO Jamie Dimon issued a strong warning Monday about the risks posed by mounting U.S. deficits, global trade tensions, and what he described as complacency from central banks. Speaking during the bank’s annual investor day in New York, Dimon said financial markets and policymakers are underestimating the danger of persistent inflation and even stagflation—a scenario that combines stagnant growth with rising prices.
Dimon said investors are too confident that central banks can control the economic fallout from current policies. He argued that markets have reacted with undue optimism following a recovery in stock prices since April, despite ongoing economic headwinds such as tariffs and geopolitical uncertainties. According to him, the lack of visible consequences from recent trade policies has created a false sense of security among market participants.
The comments come just days after Moody’s downgraded the U.S. credit outlook, citing concerns about unsustainable fiscal deficits. Dimon expressed skepticism about Wall Street’s current earnings projections for S&P 500 companies, stating he expects estimates to decline further in the coming months. He predicted that earnings growth forecasts—which began the year at 12%—could drop to zero within six months, causing price-to-earnings ratios to fall and stock prices to adjust accordingly.
Dimon also highlighted a significantly higher probability of stagflation than is currently reflected in market sentiment. He warned that the combined impact of inflation and economic slowdown could be more severe than anticipated. Meanwhile, JPMorgan’s corporate clients are reportedly maintaining a cautious stance, delaying mergers and acquisitions due to uncertainty.
Troy Rohrbaugh, co-head of JPMorgan’s commercial and investment banking division, reported that investment banking revenue is expected to drop by a mid-teens percentage in the second quarter year-over-year. However, trading revenue is projected to grow at a mid-to-high single-digit pace.
Addressing ongoing speculation about his succession plans, Dimon said there had been no changes to the timeline he outlined last year, in which he suggested he might remain as CEO for fewer than five more years and potentially serve an additional two years as executive chairman. Among potential successors, consumer banking head Marianne Lake drew attention with the longest presentation of the day, reinforcing her position as a leading internal candidate, especially after COO Jennifer Piepszak withdrew from the succession race.
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