Jamie Dimon Warns of Stagflation Risk: ‘We Have to Be Prepared’
JPMorgan CEO Jamie Dimon warned the US economy could be hit with stagflation due to a number of “inflationary” factors, including President Donald Trump’s tariffs.
“There’s a chance that (we’ll) have stagflation (in the US),” Dimon told Bloomberg in a Thursday interview at JPMorgan’s Global China Summit in Shanghai.
Dimon made clear he is not predicting stagflation, but said, “We have to be prepared for something like that.” Dimon recently warned that a recession is a “likely outcome” of Trump’s trade wars. Stagflation can be considered worse than a recession as it means growing inflation combined with rising unemployment and a shrinking economy.
According to Dimon, there are “deflationary” signs like oil prices going down, but Trump’s aggressive trade moves combined with geopolitical struggles around the world remain “inflationary” influences on the economy.
“Global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary,” he said.
Trump has continued pushing forward with his tariffs, which he insists will lead to a manufacturing boom in the United States. On Friday, he pitched a 50% tariff on the European Union, an announcement that tanked stock futures.
Moments before that, he threatened Apple with 25% tariffs, telling Apple CEO Tim Cook that iPhones should be made within the US.
The president actually offered praise for Dimon after his recent “recession” talk, calling him a “genius financially.”
“It wasn’t sustainable. What was happening. Somebody had to pull the trigger. I was willing to pull the trigger. This should have been done long ago,” Trump said about his tariffs.
Dimon acknowledged on Thursday that the US economy is doing “well,” but argued major factors like the trade wars upsetting global markets make the future unpredictable.
“We’ve effectively been in a soft landing,” he said, adding, “That does not tell you what the future’s going to be.”
Watch above via Bloomberg.
