Jamie Dimon Warns Trump’s Iran War Will Harden Inflation and Risks a Recession

(AP Photo/Alex Brandon, File)

JPMorgan Chase CEO Jamie Dimon’s annual letter to shareholders on Monday included a dire warning about the potential longer term economic impacts of President Donald Trump’s war in Iran.

Dimon began by noting the U.S. economy “continues to be resilient” but listed off several major geopolitical risks to its health. “The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China,” Dimon began.

He went on to warn of rising prices and hardening inflation in the months and years ahead. “Now, because of the war in Iran, we additionally face the potential for significant ongoing oil and commodity price shocks, along with the reshaping of global supply chains, which may lead to stickier inflation and ultimately higher interest rates than markets currently expect,” he argued, adding later:

The skunk at the party — and it could happen in 2026 — would be inflation slowly going up, as opposed to slowly going down. This alone could cause interest rates to rise and asset prices to drop.

Dimon also mentioned the “R” word and warned of the very real possibility of a full-blown in the near-term.

“While the most important outcome we should all hope for now is proper resolution of the current wars and, ultimately, peace on Earth, we do need to understand and track the economic effects of all the risks we mentioned,” he wrote, adding:

A bad confluence of events generally causes various degrees of a recession, which is accompanied by high credit losses and volatile markets, lower asset prices and higher unemployment rates, though recession would happen in different ways in different places. What might vary is inflation. There are some scenarios that would result in a recession, which generally reduces inflation, and other scenarios that would lead to a recession with inflation (stagflation — where inflationary forces overcome deflationary ones)

Read the full letter here.

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