Economists reflect Dimon’s concerns as US credit downgrades and tariff-driven uncertainty continues.
JPMorgan Chase CEO Jamie Dimon warns that the US cannot rule out the possibility of what is called Stagflation. This is an economic term for a period of high inflation and unemployment due to slow economic growth.
In an interview with Bloomberg TV on Thursday, Dimon said he “doesn’t agree that we are in the sweet spot.”
Dimon commented at JPMorgan’s Global China Summit in Shanghai. His comments go against the US background facing increasing geopolitical tensions, rising deficits and pressure on consumer prices. This has led retailers to raise prices in standby mode across all economic uncertainties, raise prices in surveillance mode, and announce the need to leave business.
Economists like Stuart McIntosh, executive director of a 30-year-old financial think tank group, reflected Dimon’s concerns in Al Jazeera.
“Stagflation is a real risk we cannot rule out. We are in a situation where there is uncertainty about tariffs, which is uncertainty about many policies that increase downward pressure on US growth.”
Last week, Moody’s rating downgraded the credit rating of the US economy. The company reduced the gold standard AAA to the US AA1 credit rating, citing an increase in national debt.
Dimon’s comments on Thursday were highlighted by his comments on Monday’s company Investor Day.
“Credit today is a bad risk,” Dimon said.
While at the summit, Dimon provided comments on President Donald Trump’s “big beautiful bill.” The tax and spending bill was passed by US lawmakers. These include key parts of the Trump administration’s agenda, including tax cuts, Medicaid, the Supplementary Nutrition Assistance Program (SNAP), and the Supplementary Nutrition Assistance Program (SNAP), increased funding for immigration enforcement, and increased new taxes at universities.
“I think they should do a tax bill. I think it will stabilize things a little, but it will probably add to the deficit,” Dimon said in a record first obtained by Reuters.
The non-partisan Congressional Budget Office says the tax bill will add $3.8 trillion to national debt.
“Inflation will rise”
In an interview with Bloomberg, Dimon added that the US Federal Reserve is doing the right thing to wait and see before it decides on monetary policy. The central bank chose to maintain stable rates at the last policy meeting. This was largely in line with the expectations of economists.
Policymakers were weighing the stable labor market at the time, even if they admitted it could be short-lived.
“This is unsustainable. We may be in a much worse economic situation almost immediately,” McIntosh said.
With both the U.S. Department of Labor and payroll and personnel firm ADP both plan to release monthly reports on employment growth rates, more information on the status of the U.S. labor market in the coming weeks is expected.
Dimon has also long warned that inflation and stagflation will continue to increase.
“I think the chances of inflation rising and stagflation rising are a little higher than others think,” he pointed out.
On Wall Street, JPMorgan Chase stocks have been promoted following Dimon’s remarks. At midday (16:00 GMT) in New York, it was 0.2% higher than yesterday’s market approaching after opening this morning.