JPMorgan Chase CEO Jamie Dimon has issued a stark warning to investors, arguing that markets are dangerously underestimating the economic risks posed by rising tariffs, persistent inflation, and geopolitical instability. Speaking at JPMorgan’s annual investor day in New York on Monday, Dimon said Wall Street’s recent rally masks a “complacency” that could unravel as earnings expectations are revised downward and macro pressures mount.
“The market came down 10%, back up 10%. That’s an extraordinary amount of complacency,” Dimon told investors. “You all think central banks can manage all this. I don’t think they can.”
Dimon, who has led JPMorgan since 2006 and chairs the board, pointed to record U.S. deficits, ongoing trade tensions, and a lack of investor discipline as catalysts for a potential reset in valuations.
Tariffs still biting, earnings to collapse?
While the stock market has bounced back since the April announcement of a sweeping new tariff regime under President Trump, Dimon cautioned that the full effect of the 10% baseline reciprocal tariffs—as well as targeted industry-specific duties—has yet to be priced in. He suggested corporate guidance remains overly optimistic and warned that S&P 500 earnings growth could fall to zero in the next six months, down from roughly 12% at the start of the year.
“I think earnings estimates will come down, which means PE [price-to-earnings ratios] will come down,” he said.
This echoes a broader concern that inflationary pressures will persist, even if they’ve temporarily eased. Dimon placed the odds of stagflation—a recession with rising inflation—at roughly twice what the market currently anticipates.
Global risks and central bank impotence
Dimon was particularly unsparing in his view of central banks, calling them “almost complacent” and casting doubt on their ability to counteract structural threats through monetary policy alone.
“They think they are omnipotent,” he said. “They just set short-term rates.”
He also flagged geopolitical risk as “very, very, very high,” though he stopped short of naming specific flashpoints.
Dimon has previously warned that America’s global standing could erode if tariff-driven supply chain fragmentation deepens, noting that some countries are already forging alternative trade deals in response to U.S. protectionism.
A cloudy outlook for JPMorgan’s core businesses
JPMorgan also used the event to update guidance for its major divisions. The investment banking unit is expected to post a “mid-teens” decline in revenue in Q2 year-over-year, according to co-head Troy Rohrbaugh. Trading revenue, meanwhile, is trending up “mid-to-high” single digits, bolstered by increased volatility.
Consumer banking remains the bank’s growth engine, but even here, productivity gains are being offset by technological disruption. CEO of Consumer Banking Marianne Lake, a top contender to succeed Dimon, said the bank expects to cut headcount by 10% over the next 4.5 years—driven by automation and AI.
The bank also increased its technology spending by US$1bn year-on-year, now forecasting a full-year tech budget of US$18bn.
Who follows Dimon?
While markets remain fixated on macro risks, Dimon’s succession remains one of Wall Street’s most closely watched leadership questions. The 69-year-old reiterated his timeline, indicating he’ll likely stay on as CEO for up to four more years, followed by a stint as executive chairman.
“If I’m here for four more years and maybe two more as executive chair, that’s a long time,” Dimon said.
Chief Operating Officer Jennifer Piepszak recently ruled herself out of the running, narrowing the field. Lake’s extended presentation on Monday—a full hour—was interpreted by some analysts as a soft endorsement. Asset and Wealth Management head Mary Erdoes is also seen as a serious contender, describing her division’s mission as “obsessing about every single basis point.”
Citigroup joins in warning
Dimon’s comments weren’t isolated. Citigroup CEO Jane Fraser published a blog on Monday warning that companies are “pausing decisions, delaying capex, and holding off on hiring” as tariff-related uncertainty spreads.
“We are entering a new phase of globalization,” Fraser wrote, “one less defined by cooperation and more by strategic self-interest.”
Dimon’s message: the bill is coming due
Dimon closed with a sobering note: while markets appear placid, they are “kind of high,” especially in light of credit risks he believes are mounting beneath the surface. He warned of a potential credit crunch, especially for firms used to easy financing and low rates.
“Credit today is a bad risk,” Dimon said bluntly.
If earnings erode, inflation sticks, and tariffs bite harder than expected, his message is clear: investors banking on a soft landing could be in for a rough awakening.
