JPMorgan Chase (JPM) CEO Jamie Dimon called a US recession a "likely outcome" amid the turmoil triggered by President Trump's tariffs and warned that a negative market reaction to trade policies "could get worse if we don't make some progress."
The boss of the largest US bank went a step further than how he described the ultimate economic outcome in his annual shareholder letter Monday, where he stopped short of predicting a recession even as he noted tariffs could lead to both short-term inflation and slower growth.
When asked Wednesday on Fox Business Network's "Mornings with Maria" if he expects a recession, Dimon said "I am going to defer to my company, but I think probably that's a likely outcome."
JPMorgan's own chief US economist, Michael Feroli, became the first major Wall Street bank researcher last week to predict a 2025 recession, attributing his call to "the weight of the tariffs."
Dimon discussed other possible outcomes of the unfolding chaos, including stress among bank borrowers. When asked Wednesday whether he was seeing a rising number of companies default on their loans, Dimon said, "Not yet, but I expect them."
"If you have rates going up a little bit, and inflation is sticky, and credit spreads are gapping out, which they're going to, I think you'll see more credit problems than people have seen in a long time," he added.
More clues on how JPMorgan could be affected may come on Friday as the bank reports its first quarter earnings.
US Treasury yields have also spiked this week, a development that Treasury Secretary Scott Bessent attributed to "some very large leveraged players" that are experiencing losses but said it is “nothing systemic."
Bessent, also appearing on "Mornings with Maria," said of the chaos in the bond market that "this is one of those de-leveraging convulsions” that happen but added, "I believe that there is nothing systemic about this."
"I think that it is an uncomfortable but normal de-leveraging that’s going on in the bond market."
Dimon on Wednesday did offer some support for the larger goals of President Trump to make trade better for the US.
"It is perfectly reasonable for someone to say trade was unfair," he said.
Within the hour, the president applauded the comment with a post from his Truth Social account, saying, "'Fixing Trade and Tariffs is a good thing!'" — attributing the phrase to Dimon.
But Dimon also urged the administration to make some progress on negotiations with other countries as a way of calming the market.
"It's not over yet," Dimon said. "I'm taking a calm view, but I think it could get worse if we don't make some progress here."
Every nation is weighing a response to US tariffs, he noted, just as every public company over the next 60-day earnings reporting period will need to share updated guidance for how they think tariffs could impact their results going forward.
"People are going to get angry," he said. The best thing now is to “take a deep breath [and] negotiate some trade deals,” Dimon said, adding that trade deals are "very large and very complex, and can't be done overnight."
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