Jamie Dimon warns of stagflation risk amid US economic uncertainty

Dimon's comments expand on remarks he made in recent , when he warned against complacency and said recession remains a possibility, adding that many of the effects of the tariffs are yet to be seen

By Ambereen Choudhury and Haslinda Amin 

Jamie Dimon said he can’t rule out the possibility of stagflation as the US grapples with huge risks from geopolitics, deficits and price pressures. 

“I don’t agree that we’re in a sweet spot,” the JPMorgan Chase & Co. chief executive officer said in a Bloomberg Television interview at the lender’s Global China Summit in Shanghai. The US Federal Reserve is doing the right thing to wait and see before making changes to interest-rate policy, he said. 

Fed officials have held interest rates steady this year amid a solid economic backdrop and uncertainty about government policy changes — like tariffs — and their potential impact on the economy. Policymakers have said they see an increased risk of confronting both higher inflation and unemployment. 

Earlier this month, the US and China agreed to sharply reduce tariffs for 90 days to hammer out a new agreement, in what promises to be difficult rounds of talks between Washington and Beijing. US President Donald Trump’s tariffs on China will likely remain at a level expected to severely curtail Chinese exports after the 90-day truce, analysts and investors say.  

“I don’t think the American government wants to leave China,” Dimon said. “I hope they have a second round, third round or fourth round and hopefully it will end up in a good place.” 

Trump’s chaotic tariff announcements and efforts to shrink or shutter government agencies have stoked concerns about trade, inflation, unemployment and a potential recession. Companies are pausing expansion, including lucrative mergers and acquisitions handled by Wall Street dealmakers, bank executives have said. 

Dimon’s comments expand on remarks he made in recent interviews, when he warned against complacency and said recession remains a possibility, adding that many of the effects of the tariffs are yet to be seen. Volatility caused by the turmoil has continued to boost JPMorgan’s stock-trading business, which notched record revenue in the first quarter. 

JPMorgan, the biggest US bank, also launched its “Center for Geopolitics” this week with research on Russia and Ukraine, the Middle East and global rearmament.  

The unit “is both for us, and it’s also to educate clients,” Dimon said. “Clients ask us all the time, What should we do about this country? How do you look at risk?”  

JPMorgan among others have indicated that the uncertainty from Trump’s policies may cause clients to sit on the sidelines. Troy Rohrbaugh, co-CEO at JPMorgan’s commercial and investment bank, said earlier this week that its investment-banking fees could fall by a percentage in the mid-teens compared to a year ago — more than analysts had predicted.  

Dimon said the US has to “attack the deficit problems,” and he also understands why investors may be cutting US dollar assets.  

On Wednesday night, House Republican leaders released a new version of Trump’s massive tax and spending bill with a higher limit on the deduction for state and local taxes and other changes in a bid to win over warring GOP factions to support the legislation. 

US Treasuries on Wednesday extended their recent selloff, with longer-term securities getting hit the hardest and an auction of 20-year debt receiving a relatively tepid reception. The selloff at one point pushed the yield on the 30-year bond up by as much as 13 basis points to almost 5.10%, its highest level since 2023. 

“I don’t worry about short-term fluctuations in the dollar,” Dimon said. “But I do understand people might be reducing dollar assets.”