JPMorgan Chase CEO Jamie Dimon expressed his anxiety about the U.S. economy on Monday, drawing parallels to the pre-2008 financial crisis. He highlighted concerns around elevated asset prices and a competitive banking landscape during an annual investor update.
Despite economists praising the Trump administration's tax cuts and deregulation for promoting economic growth, Dimon acknowledged that while optimism is high, his instinct is to remain cautious. "My own view is people are getting a little comfortable that this is real, these high asset prices and high volumes, and that we won't have any problems," he stated, wearing a black outfit and a brace on one of his hands.
Dimon warned that the economic cycle will eventually reverse, which could trigger a series of borrower defaults impacting lenders and unexpected industries. "There will be a cycle one day. I don't know what confluence of events will cause that cycle. My anxiety is high over it," he remarked. "I'm not assuaged by the fact that asset prices are high. In fact, I think that adds to the risk."
While the stock market remains robust, with the S&P 500 near its record levels, recent market upheavals have been driven by concerns over the impact of artificial intelligence models from companies like Anthropic and OpenAI. These concerns have particularly affected loans made to software firms at the center of AI developments. Private credit lenders have been impacted since Blue Owl spooked the market by selling assets to cover investor withdrawals.
This situation has affected shares of larger alternative asset managers including Apollo, KKR, and Blackstone, prompting speculation among market analysts about a potential wider downturn in credit markets.