- JPMorgan Chase released CEO Jamie Dimon's annual letter to shareholders on Monday.
- Dimon warned of rising inflation and higher interest rates.
- The remarks come as Wall Street seeks to understand the impact of Trump's policies.
In a wide-ranging letter to shareholders, JPMorgan CEO Jamie Dimon said he sees "stagflation" dangers slowing the economy as the stock market drops in response to Trump's trade wars.
"Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth," Dimon said in the 58-page letter, which addressed a range of topics from immigration to the state of civil discourse.
"While inflation has come down," he wrote, "most of what I see in the future is inflationary: continued high fiscal deficits, the remilitarization of the world and the need for infrastructure investment, including the green economy and the restructuring of trade and tariffs."
Dimon said he expects rising costs to create a "tug-of-war" over the direction of interest rates, with long-term borrowing costs ultimately heading higher. "All things being equal, the slower the growth, the lower the interest rates, and the higher the inflation, the higher the interest rates," he said.
He even referenced '"stagflation," a term popularized before the turn of the century to describe an unpleasant cocktail of high inflation, high unemployment, and tepid economic growth.
"This tug-of-war can go on for some time, but it's good to remember that in the stagflation of the 1970s, recessions did not stop the inexorable trend of rising rates," he wrote.
Dimon stopped short of saying the economy is headed for a recession. Following a two-day stock sell-off last week, the dreaded "R" word has been on everyone's lips.
He also suggested that stock market pain may not be over.
"No matter how you measure it, equity valuations are still well above their historical averages," he said, adding, "Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure."
Dimon's much-anticipated annual letter to shareholders comes as the leaders of corporations seek to understand where the economy — and the nation — is headed under Trump, who has bold plans for reorganizing the federal government and US foreign policy.
Dimon used his letter to opine on a range of problems facing our nation, as well as potential solutions.
"To be able to attack our problems at home and abroad, we must be strong. And our core strength is based upon our commitment to our values, as well as our ability to work hard and think intelligently about our problems," Dimon wrote, adding that he supported both some Democratic and Republican policy positions.
The letter also touched on what he deemed "common sense" solutions to the nation's problems, including tightening security at the border and doing away with special interests, or what he called "selfishness on the part of our citizens and elected officials."
Some Wall Street watchers have long suspected that the billionaire banker — a regular pontificator on world events — has harbored ambitions to seek public office, though he said last year that he would not seek a position in the Trump administration.
Dimon bemoaned the increasingly acrimonious tone infecting the public discourse today. Indeed, he lamented, Americans are "meaner to each other," and "a little more kindness and understanding would go a long way."
Dimon added: "I am a firm believer that we should constantly talk with each other, air our views, hold each other accountable and try to respect all sides of an argument." He said social media algorithms have amplified the problem.
JPMorgan posted a record $54 billion in profit in 2024 and has since called employees back to the office five days a week, and mandate that has led some employees to explore their options, including unionization.
In 2024, the bank earned a record $58.5 billion in net income, up from $49.6 billion the year before, it said in earnings filings. The firm's stock is up about 6% over the past year, trading as of early April at about $210 per share.
Reed Alexander is a correspondent at Business Insider. He can be reached via email at [email protected], or SMS/the encrypted app Signal at (561) 247-5758.
