JPMorgan’s Dimon flags growth risks, calls for urgent resolution in 60-page shareholder letter

Addressing investors, Dimon outlined a range of economic concerns, from trade tensions and inflationary pressures to fiscal deficit and interest rate volatility, while expressing strong confidence in the long-term fundamentals of the American economy.

Here’s what he said:

Tariffs could weigh on growth, fuel inflation

In a section of the letter, Dimon warned that the newly imposed tariffs may hurt economic growth and trigger inflation in the near term. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he wrote.

Dimon added that U.S. consumers could see rising costs, not only on imported goods but also on domestic products, as input prices rise and demand pressures shift. He stressed that the potential for inflationary outcomes could complicate monetary policy decisions and affect corporate profitability.

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Enduring faith in American economic strength

Despite the near-term risks, Dimon struck an upbeat tone on the long-term resilience of the U.S. economy. “Even with fairly extreme outcomes, our company would remain healthy,” he stated, reaffirming his faith in America’s innovative capacity and economic strength.

“I still have an abiding faith in America—the exceptional strength of our innovative economy and our resiliency,” he added.

Fiscal deficit worries align with Elon Musk’s views

While Dimon did not directly reference Tesla CEO Elon Musk, his letter echoed Musk’s concerns over the rising U.S. fiscal deficit, calling it “the highest peacetime level ever not driven by recessionary needs.”

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He warned that the current trajectory of deficit spending, compounded by quantitative tightening, has added to the uncertainty surrounding interest rates and asset valuations- a key concern for equity markets.

Quantitative Tightening and Interest Rate Volatility

Dimon flagged the uncharted territory the U.S. economy is entering, noting: “We have never had this much quantitative easing and, therefore, quantitative tightening before.”

He suggested that this dynamic could lead to heightened volatility in Treasury markets and influence investor behavior.

On interest rates, he cautioned that while the Federal Reserve controls short-term rates, long-term yields remain shaped by inflation expectations and global capital flows. “This tug-of-war can go on for some time,” Dimon said, pointing to the risk of a return to 1970s-style stagflation — a period marked by high inflation and stagnant growth.

Dimon urges swift resolution to trade disputes

The JPMorgan chief also highlighted the broader economic and market risks stemming from prolonged trade tensions, including the threat of retaliatory actions, a decline in investor confidence, and weakening corporate earnings.

“The quicker this issue is resolved, the better,” Dimon wrote, warning that cumulative economic damage could become “hard to reverse” if uncertainties persist.

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