JPMorgan CEO Dimon warns tariffs may sluggish US progress, gas inflation

By Nupur Anand

NEW YORK (Reuters) -JPMorgan Chase CEO Jamie Dimon cautioned buyers that the turmoil attributable to U.S. tariffs and a world commerce conflict may sluggish progress on this planet’s largest financial system, spur inflation and doubtlessly result in lasting damaging penalties.

In his annual letter to shareholders, revealed on Monday following a rout final week that wiped off trillions of {dollars} from world inventory markets, Dimon expressed issues about how the tariffs would impression America’s long-term financial alliances.

Asian shares plunged on Monday as buyers braced for extra losses.

“The financial system is dealing with appreciable turbulence (together with geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘commerce wars,’ ongoing sticky inflation, excessive fiscal deficits and nonetheless slightly excessive asset costs and volatility,” Dimon wrote.

Dimon, 69, has run the biggest U.S. financial institution for 19 years and is among the most distinguished voices in company America.

“We’re more likely to see inflationary outcomes … Whether or not or not the menu of tariffs causes a recession stays in query, however it is going to decelerate progress.”

JPMorgan’s economists raised the danger of a U.S. and world recession this 12 months to 60% from 40% after U.S. President Donald Trump unveiled the steepest commerce limitations in additional than 100 years final week. When requested on Sunday about falling markets, Trump mentioned typically you must take medication to repair one thing.

Dimon famous the potential for retaliation by different international locations and mentioned tariffs may have an effect on financial confidence, investments, capital flows, company earnings and the greenback.

“The faster this problem is resolved, the higher as a result of among the damaging results improve cumulatively over time and can be exhausting to reverse,” the CEO wrote.

Dimon typically weighs in on authorities insurance policies, and has been consulted by officers in instances of disaster.

His identify was floated for senior financial roles in authorities throughout the 2024 presidential marketing campaign, together with Treasury secretary, however he stayed put on the financial institution.

Tariffs additionally increase questions in regards to the course of rates of interest, Dimon mentioned. Whereas charges have declined just lately due to the weaker greenback, the prospect of slower progress and declining danger urge for food may trigger charges to rise, he mentioned, referring to the stagflation of the Seventies.

Expectations for modest U.S. progress, referred to as a tender touchdown, may be derailed.

“We enter this time of uncertainty with excessive fairness and debt costs, even after the latest decline … markets nonetheless appear to be pricing belongings with the idea that we are going to proceed to have a reasonably tender touchdown. I’m not so certain,” Dimon wrote.

(Reporting by Nupur Anand in New York; Enhancing by Lananh Nguyen and Himani Sarkar)