JPMorgan Chase CEO Jamie Dimon said Monday that markets and central bankers underappreciate the risks created by record U.S. deficits, tariffs and international tensions.
Dimon, the veteran CEO and chairman of the biggest U.S. bank by assets, explained his worldview during his bank’s annual investor day meeting in New York.
“We have huge deficits; we have what I consider almost complacent central banks,” Dimon said.
In six months, those projections will fall to 0% earnings growth after starting the year at around 12%, Dimon said.
The odds of stagflation, “which is basically a recession with inflation,” are roughly double what the market thinks, Dimon added.
Jamie Dimon, CEO of JPMorgan Chase, stated on Monday that central bankers and markets do not fully recognize the risks posed by record U.S. A. tariffs, international tensions, and deficits.
The most seasoned chairman and CEO of the largest U.S. S. . In New York, at his bank’s annual investor day meeting, bank by assets, outlined his philosophy. According to him, stock market values, which have recovered from April lows, do not accurately reflect the risks of increased inflation and even stagflation.
According to Dimon, “we have huge deficits; we have what I consider almost complacent central banks.”. “You all believe they can handle everything. He stated, “I don’t think they can.”.
“I think people feel pretty good because you haven’t seen effective tariffs,” Dimon stated. “The market dropped 10% and is now up 10%. That level of complacency is exceptional. “..”.
Dimon’s remarks come after Moody’s downgraded the U.S. A. credit rating on Friday due to worries about the mounting national debt. Concerns that President Donald Trump’s trade policies will increase inflation and slow the largest economy in the world have caused markets to fluctuate over the past few months.
Wall Street earnings estimates for SandP 500 companies have already dropped in the first weeks of Trump’s trade policies, and Dimon stated Monday that he thinks they will continue to decline as companies pull or lower guidance in the face of uncertainty.
According to Dimon, those estimates will drop to 0% earnings growth in six months after beginning the year at about 12%. If that occurs, stock prices will probably decline.
In reference to the price to earnings ratio that stock market analysts closely monitor, Dimon stated, “I think earnings estimates will come down, which means PE will come down.”.
According to Dimon, the likelihood of stagflation, “which is basically a recession with inflation,” is about twice as high as the market believes.
Regarding acquisitions and other transactions, corporate clients are still in “wait-and-see” mode, according to one of Dimon’s top deputies.
Troy Rohrbaugh, a co-head of the company’s commercial and investment bank, stated that trading revenue was trending higher by a “mid-to-high” single-digit percentage, while investment banking revenue is expected to drop by a “mid-teens” percentage in the second quarter when compared to the same period last year.
Dimon stated that nothing has changed from his advice last year, when he stated that he would probably stay for less than five more years, in response to the perennially asked question of when he would transfer the CEO responsibilities to one of his deputies.
As executive chairman, Dimon stated, “It’s a long time if I’m here for four more years, and maybe two more.”. “.”.
