Jamie Dimon, chief executive of JPMorgan Chase, issued a stark warning on Monday that financial markets are underestimating the risks posed by President Donald Trump’s tariffs and their broader economic impact. Speaking at the bank’s investor day in New York, Dimon cautioned that the US stock market could fall by as much as 10% as companies begin to adjust earnings expectations in the face of rising costs, the Wall Street Journal reported.
Dimon: Tariff effects not fully priced in
Dimon argued that the full impact of tariffs has not yet filtered through to the broader economy. “It’s an extraordinary amount of complacency,” he said, pointing out that the last time the United States imposed 10% tariffs on all major trading partners was in 1971. Despite a recent rebound in markets following the temporary pause of new levies announced on April 2, Dimon said that “American asset prices, I still think they’re kind of high,” adding, “I think credit today is a bad risk.”
While inflation in April was modest, economists and executives are warning of significant price pressures in the months ahead due to higher import costs. Several major companies — including General Motors, JetBlue, and Volvo — have already withdrawn earnings guidance for 2025, citing uncertainty over input costs. Retail giant Walmart announced last week it would be raising prices across categories, calling the cost increases “unprecedented in history.”
Stock market faces 10% correction, says Dimon
The JPMorgan chief said he expected a potential market correction as companies lower earnings forecasts and investors reassess valuations. “Stock markets could sell off by around 10%,” he said. Dimon also warned that a credit crunch may emerge as the easy money conditions of the past decade evaporate. “We could see companies that relied on cheap credit struggle to refinance as rates stay higher and banks tighten lending standards,” he added.
Scepticism toward central banks and global response
Dimon also expressed doubts about the ability of central banks to counteract a potential global downturn triggered by tariffs. “We have what I consider almost complacent central banks that think they are omnipotent,” he said. “They just set short-term rates.” He questioned whether monetary policy alone could support the economy in the event of a sustained trade shock.
International reaction to US tariffs remains unpredictable, Dimon noted. “It is not clear how other nations will respond,” he said. “Some are already pivoting and signing trade deals with each other to bypass the United States.”
A broader warning on America’s economic posture
Dimon has been a vocal critic of Trump’s aggressive trade strategy, warning not just of the economic costs but of the broader consequences for the US’s global standing. His remarks come amid growing concerns from both business leaders and economists that the administration’s tariff policies could trigger a slowdown in global trade and weaken the US economy’s resilience.
While acknowledging that his predictions haven't always played out, Dimon emphasised that the risks now appear more tangible. “This is not just about numbers,” he said. “This is about America’s position in the world economy — and that position is not guaranteed.”
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