JPMorgan CEO Dimon warns tariffs could slow US growth, fuel inflation

Jamie Dimon expressed concerns about how the tariffs would impact America's long-term economic alliances

JPMorgan Chase CEO Jamie Dimon cautioned investors that the turmoil caused by US tariffs and a global trade war could slow growth in the world's largest economy, spur inflation and potentially lead to lasting negative consequences. 

In his annual letter to shareholders, published on Monday following a rout last week that wiped off trillions of dollars from global stock markets, Dimon expressed concerns about how the tariffs would impact America's long-term economic alliances.

Asian stocks plunged on Monday as investors braced for more losses. 

"The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and 'trade wars,' ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," Dimon wrote. 

Dimon, 69, has run the largest US bank for 19 years and is one of the most prominent voices in corporate America. "We are likely to see inflationary outcomes ... Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth." 

JPMorgan's economists raised the risk of a US and global recession this year to 60 per cent from 40 per cent after US President Donald Trump unveiled the steepest trade barriers in more than 100 years last week. When asked on Sunday about falling markets, Trump said sometimes you have to take medicine to fix something. 

Dimon noted the potential for retaliation by other countries and said tariffs could affect economic confidence, investments, capital flows, corporate profits and the dollar. 

"The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse," the CEO wrote. 

Dimon often weighs in on government policies, and has been consulted by officials in times of crisis. His name was floated for senior economic roles in government during the 2024 presidential campaign, including Treasury secretary, but he stayed put at the bank. 

Tariffs also raise questions about the direction of interest rates, Dimon said. While rates have declined recently because of the weaker dollar, the prospect of slower growth and declining risk appetite could cause rates to rise, he said, referring to the stagflation of the 1970s. 

Expectations for modest US growth, known as a soft landing, could also be derailed. "We enter this time of uncertainty with high equity and debt prices, even after the recent decline ... markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure," Dimon wrote.