JPMorgan Chase CEO Jamie Dimon says markets underestimate risks

JPMorgan Chase CEO Jamie Dimon said investors are underestimating the risks facing the global economy and won’t buy stocks or long-term U.S. Treasury bonds at their current prices.

In an hour-long interview with Wilfred Frost that aired late Monday, Dimon said markets had not fully taken into account a growing list of geopolitical and financial threats.

“I think those risks are probably greater than other people think,” Dimon said, pointing to wars in Ukraine and the Middle East, tensions between the United States and China and increased military spending at a time of rising government deficits.

Asked whether markets were underpricing the possibility of a major shock, Dimon said it was difficult to know exactly what risks were currently reflected in asset prices.

“It’s possible for something to be cooked, but it’s actually what’s uncooked,” he said.

Dimon, who leads the world’s largest bank in terms of market value, frequently warns the public about the economic risks he sees.

His latest comments contrast with investors’ recent willingness to look past wars, tariffs and other shocks. S&P 500 It has returned about 10% this year as consumers continue to spend, inflation slows and investors embrace AI trading.

Last week, JPMorgan Chase and its peers posted blockbuster quarterly results, fueled by rising trading and investment banking revenues; This strengthened the view that the US economy has weathered the recent geopolitical turmoil better than expected.

Dimon acknowledged in an interview with “The Master Investor Podcast” that the global economy has become more resilient because energy dependence is lower than in previous years, but cautioned that this does not rule out the possibility of a sudden turning point.

“You may need more straws on the camel’s back to cause this tipping point,” he said. “Even if the current war started again, maybe that wouldn’t be enough.”

Dimon said persistent U.S. budget deficits would eventually force a showdown and potentially push interest rates up.

“This is going to become a problem, in my view,” he said, predicting higher interest rates as so-called bond vigilantes demand more compensation to finance the government’s debt.

When asked, Dimon said he wouldn’t buy long-term Treasuries: “Personally, no,” he said.

Even if inflation falls to the Federal Reserve’s 2% target, “the 10-year bond should probably be in the 4% to 4.5% range,” he said, adding that he sees little increase in Treasury prices.

He was equally cautious about stocks. Dimon said he would consider an individual stock if it were a “big investment,” but he wouldn’t be a buyer of the broader market at current valuations.

Dimon also struck a measured tone on artificial intelligence, comparing today’s spending boom to the early days of the internet.

“The amount of money being spent is huge. Will it pay off overall? Probably just like the internet did,” Dimon said.

He also noted that while the early major players such as Yahoo and Netscape faded away during the internet boom, the winners in the end were: Google And Facebook appeared later.