JPMorgan Chase CEO Jamie Dimon referred to as the US inventory market “kind of inflated” — whilst he urged critics to “get over” their fears of President Trump’s proposed tariffs.
Throughout an interview on Wednesday with CNBC on the World Financial Discussion board in Davos, Switzerland, Dimon cautioned traders on the dangers of elevated deficit spending, sticky inflation and geopolitical tensions.
“Asset prices are kind of inflated, by any measure. They are in the top 10% or 15%” of historic valuations, Dimon mentioned.
The 68-year-old chief government mentioned he was talking particularly in regards to the US inventory market – which has seen document beneficial properties throughout a multi-year bull run.
The S&P 500 had annual beneficial properties of greater than 20% each final 12 months and in 2023 – the primary time the US inventory market has seen back-to-back beneficial properties of that dimension in 25 years. Final 12 months, Dimon even mentioned JPMorgan’s shares have been too costly.
Dimon additionally identified that elements of the bond market, just like the nation’s sovereign debt, are “at all-time highs.”
“So yeah, they’re elevated, and you need fairly good outcomes to justify those prices,” Dimon mentioned on the convention. “Having pro-growth strategies helps make that happen, but there are negatives out there, and they can tend to surprise you.”
In the meantime, Dimon chastised critics of Trump’s hefty proposed tariffs on China, Mexico and Canada, telling them to “get over it.”
Tariffs might be “an economic tool” or “an economic weapon,” relying on how they’re used, Dimon mentioned.
“I would put in perspective: If it’s a little inflationary, but it’s good for national security, so be it,” he added. “I mean, get over it.”
In his first days in workplace, Trump has doubled down on his threats to impose sizable tariffs – together with a ten% tariff on Chinese language imports and 25% tariffs on items from Mexico and Canada, to take impact Feb. 1.
Economists and enterprise leaders have warned that the tariffs might stoke inflation as soon as extra, particularly mixed with mass deportations.
However Dimon signaled extra religion in Trump’s plan, arguing that tariffs can be utilized as a negotiating instrument to “bring people to the table.” He mentioned he believes the Trump administration is utilizing the threats this fashion.
It’s not the primary time Dimon has backed Trump, saying quickly after the president’s election win that Wall Road bankers have been “dancing in the street” on hopes that Trump would loosen business rules.
If the threats are merely a bartering instrument, as Dimon prompt, then the US would possibly levy lighter tariffs on China, Mexico and Canada, or no new tariffs in any respect.
“We’re going to find out,” Dimon mentioned.
Throughout his first time period, Trump imposed tariffs on items like photo voltaic panels and washing machines, and supplies like metal and aluminum. He additionally elevated tariffs on items from China.
Regardless of Dimon’s extra upbeat tackle the proposed tariffs, he has lengthy been reluctant to assert victory over inflation.
In 2022, the chief government – who grew JPMorgan Chase into the biggest American financial institution by each belongings and market valuation – warned {that a} “hurricane” was headed for the US economic system.
“I do have a little more caution around a bunch of subjects,” Dimon mentioned through the World Financial Discussion board. “What I’m a little cautious about is the deficit spending; it’s a global issue, not just an American issue.”
He additionally stood by his earlier statements on inflation, predicting it may be right here to remain.
“‘Will inflation go away?’ I’m not so sure,” Dimon mentioned.
He mentioned world issues, just like the battle in Ukraine, tensions within the Center East and threats from China have “just got me very concerned how it’s going to affect our world for the next 100 years.”
