JPMorgan CEO Jamie Dimon is sounding alarms about the U.S. stock market, suggesting that the likelihood of a significant downturn is notably higher than many on Wall Street perceive. He expressed his concerns during an interview with the BBC, warning that a stock market correction—characterized as a decline of at least 10%—could materialize within the next six months to two years.
Dimon stated, “I would give it a higher probability than I think is probably priced in the market and by others,” indicating that he estimates the chances to be around 30%, significantly above what he believes is currently reflected in market valuations.
The JPMorgan chief cited a multitude of factors contributing to an increasingly uncertain economic climate. He pointed to geopolitical tensions, elevated fiscal spending, and a global atmosphere he characterized as increasingly aggressive. Dimon provocatively remarked on the state of global security, saying, “People talk about stockpiling things like crypto. I always say we should be stockpiling bullets, guns, and bombs.” His statements reflect a growing concern over global safety issues, a shift from traditional financial metrics to a broader assessment of geopolitical risks.
The banker has previously addressed security matters, including a stark warning earlier this year that the U.S. could quickly deplete its missile stockpiles in the event of a conflict in the South China Sea. “All these things cause a lot of issues that we don’t know how to answer,” Dimon remarked, suggesting that levels of uncertainty are currently higher than what might be considered normal.
Additionally, he noted persistent risks stemming from inflation, especially in light of past fiscal policies, including tariffs established during the Trump administration, that have yet to fully impact the economy.
Dimon’s cautionary tone aligns with recent comments made by Kristalina Georgieva, managing director of the International Monetary Fund. During a presentation at the Milken Institute in Washington, D.C., she urged the audience to “buckle up,” reinforcing the notion that uncertainty remains a defining characteristic of today’s global economy. Georgieva underscored that the robustness of the global economic framework is still untested amid looming challenges.
Adding to the discourse, experts at the Bank of England have expressed apprehension about a potential “sudden correction” in global markets, especially given the inflated valuations of leading technology companies focused on artificial intelligence. They highlighted that these high equity valuations could render the markets vulnerable should the optimistic expectations surrounding AI fail to materialize.
Dimon echoed these concerns, suggesting that a portion of the investments flowing into AI technology may ultimately be futile. He maintained a belief in the long-term potential of artificial intelligence, drawing parallels to other technological advancements, while acknowledging that many investors in the sector might not reap the benefits. “The way I look at it is AI is real; AI in total will pay off – just like cars in total paid off, and TVs in total paid off, but most people involved in them didn’t do well,” he concluded.
