JPMorgan’s Dimon warns inflation, political polarization, wars creating risks not seen since WWII

NEW YORK – The country’s maximum influential banker, JPMorgan Chase CEO Jamie Dimon, informed traders Monday that he continues to be expecting the U.S. economic system to be resilient and develop this yr. But he worries geopolitical occasions together with the war in Ukraine and the Israel-Hamas war, in addition to U.S. political polarization, may well be creating an atmosphere that “may very well be creating risks that could eclipse anything since World War II.”

The feedback got here in an annual shareholder letter from Dimon, who continuously makes use of the letter to weigh in vast subjects like politics, legislation and world occasions and what it will imply to JPMorgan Chase, in addition to the wider economic system.

“America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” Dimon mentioned. “We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy. During this time of great crises, uniting to protect our essential freedoms, including free enterprise, is paramount.”

Dimon had particular concerns with continued large amounts of deficit spending by the U.S. government and other countries, as well as the need for countries such as the U.S. to remilitarize and continue to build out green infrastructure, all of which will likely keep inflation higher than investors expect.

Because of these issues, Dimon said he is less optimistic that the U.S. economy will achieve a “soft landing,” which he outlined as modest expansion together with declining inflation and rates of interest, in comparison to the wider marketplace. While he says the traders are pricing in a “70% to 80%” probability of a comfortable touchdown, Dimon thinks the probabilities of such an excellent end result are “a lot less” than that.

“These significant and somewhat unprecedented forces cause us to remain cautious,” he said.

Like many other CEOs, Dimon said he sees promise in the use cases of artificial intelligence. The bank has found 400 use cases for AI so far, Dimon said, particularly in the bank’s marketing, fraud and risk departments. The bank also is exploring using AI in software development and general employee productivity plans.

“We are completely convinced the consequences (of AI) will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others.”