Jamie Dimon, CEO of JPMorgan Chase, said: On Friday, he warned of a “volatile” global situation, highlighting a range of pressures including war, rising geopolitical tensions and inflation that could threaten the economy and weigh on the performance of the country's largest banks.
Mr. Dimon's comments, which coincided with the bank's quarterly earnings report, showed weakness in some parts of its business and come at a time when the Federal Reserve is grappling with whether and when to cut interest rates, particularly in the U.S. It added to his concerns about the economy. Given this week's better-than-expected inflation data.
“We have never truly experienced the full effects of quantitative tightening on this scale,” Dimon said in a statement, referring to the Fed's efforts to cool the economy.
Mr. Dimon is the most prominent banking leader, and his comments are closely followed on Wall Street and Washington. He was the only head of a major American financial institution to attend a dinner for the Japanese prime minister at the White House this week.
However, his melancholy is also at odds with the ever-changing financial markets. For example, in late 2022, he predicted a sharp turn in the economy next year and a potentially deep recession. Instead, the American economy grew rapidly in 2023.
Others are confused as well. Many economists had predicted a so-called soft landing this year, a gradual easing in growth and inflation that would allow the Federal Reserve to lower interest rates in an orderly manner.
There are now few signs of economic slowdown, and it is unclear whether the central bank will cut interest rates three times this year as officials had expected. Mr. Dimon is one of the few to say he is preparing for the possibility of another rate hike, which would imply even more extreme inflation than is currently being measured.
Mr. Dimon elaborated further on the difficult environment in his annual letter to shareholders this week. As before, he lamented that the U.S. is spending deficits and checking off a list of complaints about where public and private leadership is falling short. (“Social media can do more,” he wrote.) Citing Russia’s invasion of Ukraine and other crises, he said recent events “risk eclipsing everything since World War II.” There is a very high possibility that it is being produced.”
JPMorgan's financial performance was affected by more general issues. Although revenue exceeded $13 billion in the first quarter, the bank's average customer deposits fell and it warned of higher future expenses. JPMorgan also revealed a decline in its so-called net interest income, a closely watched financial metric that essentially measures how much money it can make from loans.
Wells Fargo, the nation's third-largest bank, separately reported profits on Friday that included a decline in this measure.
JPMorgan stock fell 3% in pre-market trading on Friday.
