JPMorgan Chase CEO Warns of Imminent US Economic Deterioration

JPMorgan Chase CEO Jamie Dimon is sounding a cautious alarm, signaling headwinds ahead for the U.S. economy. His latest comments suggest a cooling off period after the significant government stimuli of the past, urging businesses and investors to brace for potential challenges in the coming months.

Speaking at a conference on Tuesday, Dimon remarked, “I think the reality of the economic data is going to get a little bit worse, soon.”

While surveys reveal a softening in consumer and business confidence, likely influenced by the ongoing tariff tensions of the previous administration, U.S. headline job growth and consumer spending continue to show resilience.

Dimon downplayed the significance of survey data, noting that “consumers and business(es) have never been particularly good predictors” of economic turning points. However, he acknowledged that a “soft landing” for the economy might not be as smooth as hoped.

“Jobs will come down a little bit. Inflation will go up a little bit, hopefully only a little bit,” he said, also citing reduced immigration as a complicating factor.

Adding a layer of complexity, the nationwide protests surrounding immigration policy continued to spread to numerous cities across the country. While this has a tangential impact the economy, it adds a layer of policy uncertainty.

Adding to the picture, data released by the U.S. Labor Department on Wednesday indicated that the full impact of tariffs had yet to fully materialize, with May’s CPI inflation figures coming in below expectations.

Dimon’s recent economic posture has been notably cautious, with his Tuesday remarks not particularly more pessimistic than his previous assessments.

Late last month, Dimon cautioned that the U.S. bond market was on the verge of a “blowup” following the “massive overspending” by the government and quantitative easing implemented by the Federal Reserve. He subsequently called on the previous administration to steer the U.S. towards a more sustainable path.

On Tuesday, Dimon noted that, had the previous administration remained committed to its initial tariff plans, a recession was likely on the horizon – a more dire prediction than the current situation, as he sees it.

He believes the previous administration’s tariff policies are beginning to exert a negative influence on the economy, even if these effects are still nascent. He underscored the temporary nature of the front-loading behavior by many firms seeking to avoid tariffs, pointing out that this activity is essentially now complete.

Dimon also flagged concerns within the private credit sector, now a booming area on Wall Street and one viewed as a potential trouble spot in an economic downturn. The CEO explained that the risk profiles for private credit differ significantly for banks, who arrange these deals and then move them off their books, verses investors who seek long-term returns from this asset class.

“If I was a fund manager, would I think this is a great time to buy credit? No,” he stated. “I would not buy those assets at these prices and these spreads today.”