Jamie Dimon warns of inflation risks and looming recession

JPMorgan Chase CEO Jamie Dimon has raised alarms about the U.S. economy, warning that soaring inflation and recent tariff policies could push markets toward a recession.

In his annual letter to shareholders, Dimon expressed concern over the economic impact of President Donald Trump’s sweeping tariffs announced on April 2, which triggered the worst stock selloff since the COVID-19 crisis.

Dimon outlined the short-term effects of the tariffs, predicting inflationary pressures on both imported and domestic goods due to rising input costs.

“We are likely to see inflationary outcomes, not only on imported goods but on domestic prices,” he wrote.

While he acknowledged legitimate reasons for the tariffs, Dimon cautioned that their cumulative effects could impair growth.

“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he added.

The JPMorgan executive warned that markets may be underestimating the risk of economic instability.

“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 stated, emphasising that unresolved tariff uncertainties could exacerbate negative economic impacts over time.

Dimon’s concerns extend beyond tariffs to broader financial risks.

He highlighted persistent inflation and high market valuations as significant challenges, noting that these factors could lead to tighter credit conditions and reduced consumer spending.

“Even with the recent decline in market values, prices remain relatively high. These significant and somewhat unprecedented forces cause us to remain very cautious,” he wrote.

Despite his earlier optimism about tariffs benefiting national security, Dimon’s latest remarks reflect a shift in tone as economic pressures mount.

He stressed the urgency of resolving trade disputes quickly to mitigate long-term damage.