During JPMorgan's investor day in New York, CEO Jamie Dimon expressed concerns about the underestimated economic impact of tariffs and their potential to trigger a significant stock market decline. He noted that the financial implications of the ongoing tariffs, even scaled-back ones under President Trump, have not fully permeated the economy. Dimon criticized investor complacency and warned that the stock market could drop by around 10% as companies adjust earnings expectations due to increased costs.
He cited examples like GM, JetBlue, and Volvo withdrawing guidance, and Walmart signaling price hikes. Dimon also cautioned about a potential credit crunch and questioned the effectiveness of central banks in mitigating a global economic slowdown. He labeled current American asset prices as overvalued and expressed skepticism about the resilience of the financial system.
Furthermore, Dimon highlighted that other countries might circumvent the tariffs by establishing new trade partnerships, potentially undermining the U.S.’s economic position. He emphasized the very real risk of a U.S. recession amid declining consumer confidence.
In summary, Jamie Dimon's warnings underscore the potential economic risks associated with current tariff policies, highlighting the need for careful consideration of trade strategies and their broader implications on the global economy.