JPMorgan CEO Warns of Stagflation
At the 2025 Investor Day, Jamie Dimon, the CEO of JPMorgan, issued a clear warning: the US could face stagflation. This arises from a volatile mix of factors such as geopolitical tensions, high budget deficits, and persistently high inflation.
Underestimated Risks
Dimon warned that many market participants are underestimating the risk of both rising inflation and stagflation. He sees the likelihood of these scenarios as higher than many others do.
Difficult Situation for Politics
This challenging economic environment could significantly complicate political measures, particularly due to the combination of inflation and significant fiscal deficits. Despite these concerns, Dimon considers the previous actions of the Federal Reserve to be appropriate.
Deteriorating Credit Quality
Another issue that the JPMorgan CEO raises is the deterioration of credit quality in the US. Many investors might underestimate the risk of an economic downturn, which Dimon emphasizes further.
Dimon’s overall warning describes a “No Sweet Spot” for the US economy: The challenges from geopolitical uncertainties, high deficits, and persistently high inflation create an extreme risk for an economy in stagnation, with prices rising simultaneously.