JPMorgan Chase CEO Jamie Dimon said he remains cautious about the U.S. economy over the next two years due to a combination of financial and geopolitical risks.
“You have all these very powerful forces that are going to impact us in '24 and '25,” Dimon told Andrew Ross Sorkin in a CNBC interview on Wednesday at the World Economic Forum in Davos, Switzerland.
“Ukraine, the terrorist activities in Israel [and] “Quantitative tightening in the Red Sea, and I still wonder if we understand exactly how that works,” Dimon said. Quantitative tightening refers to moves by the Federal Reserve to reduce its balance sheet and curb previous efforts, including bond-buying programs.
Dimon has urged caution in recent years, despite record profits at JPMorgan, the country's largest bank, and a U.S. economy that has exceeded expectations. Despite the devastating effects of inflation, the American consumer has remained largely healthy due to good levels of employment and pandemic-era savings.
Dimon says the relatively buoyant stock market in recent months has lulled investors about the potential risks. The S&P 500 The market index is up 19% over the past year and is no longer far from highs.
“I think it’s a mistake to assume that everything is OK,” Dimon said. “When the stock market goes up, it's like this little drug that we all think is great. But remember, we've had so much fiscal stimulus, so I'm a little more cautious.”
Goldman Sachs CEO David Solomon said Wednesday that the market environment “feels better today” than a year ago without geopolitical issues, but that rising U.S. debt concerns him.
“I’m very concerned about the growing debt,” Solomon said. “It is a major risk that we must address and anticipate. It might not happen for another six months.”
Dimon is no stranger to dire predictions: in 2022, he warned investors of an economic “hurricane” due to quantitative tightening and the Ukraine conflict.
In Wednesday's wide-ranging interview, Dimon discussed his views on Ukraine, former President Donald Trump, immigration, commercial real estate and Bitcoin.
“We must teach the American public that this is about freedom and democracy for the free world and that the fight is for that,” Dimon said of the Ukraine conflict.
Read more: Jamie Dimon says: “Be prepared for an economic hurricane caused by the Fed-Ukraine war.”