JP Morgan boss Jamie Dimon sounds warning on US stock market fall

The head of JP Morgan told the BBC that there is now a higher risk of a serious decline in US stocks reflected in the market.

Jamie Dimon, head of America’s largest bank, said he was “much more worried than others” about a serious market correction that could occur in the next six months to two years.

In a rare and wide-ranging interview, the banking boss also said the US had become a “less reliable” partner on the world stage.

He warned he was still “somewhat concerned” about inflation in the US but insisted he thought the Federal Reserve would remain independent despite the Trump administration’s repeated attacks on Jerome Powell.

Jamie Dimon was in Bournemouth, where he announced an investment of around £350 million in JP Morgan’s campus, as well as a philanthropic investment of £3.5 million in local not-for-profit organisations.

Commenting on the investment, Chancellor Rachel Reeves said: “JP Morgan Chase, one of Dorset’s largest private sector employers, expanding its Bournemouth campus is great news for the local economy and the people who live here.”

Before the interview, Dimon appeared outside a town hall on campus — with a figure that looked more like an off-duty rock star than a bank CEO — wearing an open-collared shirt and jeans and walking onto the stage high-fiving staff.

Beginning with his assessment of the UK economy, Dimon said he felt Rachel Reeves was doing a “great job” and felt optimistic about the government’s initiatives to boost innovation and reduce regulation.

But looking at the broader economic picture, he felt the risk of US stock markets overheating was increasing.

“I worry about this a lot more than others,” he said.

He added that “there are a lot of things out there” that create an atmosphere of uncertainty, pointing to risk factors such as the geopolitical environment, fiscal spending and the remilitarization of the world.

“All of this causes a lot of problems that we don’t know how to respond to,” he said.

“So I say the level of uncertainty in most people’s minds must be higher than what I would call normal.”

Much of the rapid growth in the stock market in recent years has come from investments in artificial intelligence.

The Bank of England on Wednesday drew a comparison with the dot com boom (and subsequent crash) of the late 1990s and warned that the value of AI technology companies “appears to be stretched” and there is a growing risk of a “sharp correction”.

“In my opinion, artificial intelligence is real, artificial intelligence will pay off in total,” he said.

“Just like cars had total return and TVs had total return, but most people who were interested in those didn’t perform well.”

He added that some of the money invested in AI “will probably be lost.”

Global security has been a focus of late for the JP Morgan boss, with a letter to shareholders earlier this year warning that the US would run out of missiles within seven days of the South China Sea war.

Considering how the world can combat risk factors, he pointed to greater military investment.

“People talk about stockpiling things like crypto, I always say we should stockpile bullets, guns and bombs.

“The world is a much more dangerous place, and I would rather have security than not.”

Another risk factor that many in the global economy believe the United States may face is pressure on the independence of America’s central bank, the Federal Reserve.

On this issue, he himself said he thought central bank independence was important but was willing to accept Trump’s “word” that he would not interfere with the Fed’s independence, even though the president called current Fed chair Jerome Powell “idiot” and “idiot” for failing to lower interest rates faster.

Dimon acknowledged that the United States had become “a little less reliable,” but said some of the Trump administration’s actions had pushed Europe to take action over underinvestment in NATO and a lack of economic competitiveness.

Dimon also shared his predictions on a potential breakthrough in trade negotiations between India and the US.

He said he wanted to “bring India closer” and believed a deal was imminent to reduce additional tariffs imposed on India as a penalty for its ongoing trade with Russia, particularly on its oil purchases.

“I actually talked to a couple of Trump officials who said they wanted to do this, and I was told they were going to do it.”

Jamie Dimon’s name is frequently mentioned among major financial players who may transition to politics.

Ahead of Trump’s re-election last year, influential investor Bill Ackman said he would be an “incredible choice” as treasury secretary and was also the subject of speculation about a potential presidential run.

When asked about his political goals, Dimon said that was “not in the cards” and that his focus was on keeping JP Morgan a “healthy and vibrant company.”

“If you gave me the presidency, I would take it,” he joked. “I think I’ll do a good job.”