JPMorgan CEO Jamie Dimon Warns 'Huge Deficits,' 'Complacent Central Banks' Could Lead To Stagflation

JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon delivered a sobering assessment of the economic landscape at the bank's annual investor day on Monday. 

The head of the nation's largest bank warned that markets are displaying an "extraordinary amount of complacency" in the face of mounting risks from tariffs, record U.S. deficits and geopolitical tensions.

The Details: Dimon cautioned that investors and central banks are underestimating the potential for persistent inflation and even stagflation. In fact, he said the odds of a stagflationary scenario are "roughly double" what people think, according to CNBC. 

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He noted that the full economic impact of tariffs has yet to be felt and predicted that earnings forecasts for S&P 500 companies could fall to zero growth within six months, down from about 12% at the start of the year. 

"I think earnings estimates will come down, which means PE will come down," Dimon said, signaling the potential for further declines in stock prices if corporate profits falter.

The JPMorgan CEO also pointed to the U.S. budget deficit after Moody's downgraded the country's credit rating last Friday, citing concerns over a sustained increase in government debt and interest payment ratios.  

"We have huge deficits; we have what I consider almost complacent central banks," Dimon said.

"You all think they can manage all this. I don't think they can," he added.

Despite these headwinds, JPMorgan reaffirmed its 2025 expense and net interest income guidance, projecting $90 billion in core lending revenue with an additional $4.5 billion possible from trading, depending on market conditions.

However, the bank expects investment banking fees to drop by a "mid-teens" percentage in the second quarter compared to last year, reflecting a slowdown in dealmaking as corporate clients adopt a cautious, wait-and-see approach.

Dimon also addressed the bank's succession plans and reiterated his intention to step down as CEO within the next few years, but not offering a more specific timeline. 

"If I'm here for four more years, and maybe two more [as executive chairman]," Dimon said, "that's a long time.

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