JPMorgan Chase chairman and CEO Jamie Dimon has warned investors that recently announced tariffs will likely increase inflation and cause many to consider a greater recession probability. In light of these "significant and somewhat unprecedented forces," Dimon indicated the company will remain cautious going forward.
“There are many uncertainties surrounding the new tariff policy: the potential retaliatory actions, including on services, by other countries, the effect on confidence, the impact on investments and capital flows, the effect on corporate profits and the possible effect on the U.S. dollar,” Dimon said in a letter to shareholders. “The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse.”
Whether the tariffs could lead to a recession is not clear, but they will slow down growth, he said. This more cautious posture is a shift from Dimon’s sentiments earlier this year that some inflation from tariffs was acceptable if they helped boost U.S. manufacturing. Dimon said he hopes the United States will experience positive benefits from the tariffs after negotiations.
Recommended For You
“My most serious concern is how this will affect America’s long-term economic alliances,” said Dimon.
The influential business leader noted that the U.S. economy also faces the unknown effects of quantitative tightening, which could lead to higher volatility in the treasury markets. He said this trend is not necessarily bad for JPMorgan, but not particularly good for capital markets.
“Fortunately, there are many regulatory changes now being discussed that could ameliorate the situation,” said Dimon.
While inflation has come down, Dimon said he sees several forces that could spike it back up in the future, including continued high fiscal deficits, the remilitarization of the world and the need for infrastructure investment, including the green economy and the restructuring of trade and tariffs.
“While the Federal Reserve essentially controls short-term interest rates, it does not effectively control 10-year interest rates,” Dimon wrote in his letter. “The Fed can take actions that can affect the 10-year interest rate in the short run, but, ultimately, the 10-year rate will be based upon inflation, the strength of the U.S. economy and expectations of the future value of the dollar, and the supply and global demand for long-term treasuries.”
Dimon closed his letter optimistically, saying, “I still have an abiding faith in America—the exceptional strength of our innovative economy and our resiliency.”
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
