By Saeed Azhar and Manya Saini
April 28 (Reuters) – JPMorgan Chase CEO Jamie Dimon said on Tuesday he is not worried about inflation, but added among the worst-case scenarios for the economy is the risk of stagflation.
The Iran conflict could intensify inflationary pressures as higher oil prices feed through to fuel, transport and manufacturing costs, raising input prices for businesses and lifting consumer prices more broadly, according to economists.
“The worst case is stagflation, and I just wouldn’t take it off the list,” Dimon, who runs the world’s largest bank by market cap, said at a Norges Bank Investment Management conference.
Stagflation refers to a period of high inflation, weak economic growth and rising unemployment occurring at the same time, a combination that makes it difficult for policymakers to respond effectively.
“My view is that there are a lot of inflationary things out there, including the Iran War, the re-militarization of the world, the infrastructure needs of the world, and our deficits,” he added.
This dynamic risks are prolonging inflation and complicating the path for central banks, which may need to keep interest rates higher for longer to contain price pressures.
Earlier this month, Dimon had also warned in his shareholder letter that the war in Iran risks oil and commodity price shocks that could keep inflation sticky and push interest rates higher than the market now expects.
NOT WORRIED ABOUT U.S. ECONOMY
Dimon said on Tuesday he is not worried about the U.S. economy, but added the risk of a cyber attack and geopolitics, including the wars in Iran and Ukraine, are two of the biggest risks for the economy.
“The bad guys can use cyber and they’re going to get stronger, more powerful in terms of finding vulnerabilities,” he said.
The comments around cyber risks come as emergence of Anthropic’s Mythos is setting up a scramble from the banking industry to gain access and test the technology, as regulators rush to examine the cybersecurity risks the new AI model raises.
When asked if he would seek the U.S. presidency in the future, Dimon, who has been JPMorgan CEO for two decades, joked it was too late for him.
“If you were to anoint me, I’d be happy to do it. But there’s no way I’d get through primaries, and plus I love what I do.”
There has been speculation in the past about Dimon’s potential presidential run, though he has always brushed it aside.
PRIVATE CREDIT TURMOIL
Private credit has become central to investor anxieties this year for the banking sector, as investors weigh whether a credit event in the multi-trillion-dollar industry will ripple through the global financial system.
Dimon reiterated his view that a credit market downturn could be worse than expected. Some firms “may be brilliant, but I guarantee you not all 1,000 of them are,” he said.
The sector has been roiled by concerns that artificial intelligence could disrupt legacy software businesses, an area where private credit lends heavily.
Earlier this month, Wall Street executives said they were stress‑testing or monitoring private credit portfolios as the asset class comes under scrutiny, but said they were comfortable with their exposure.
“We haven’t had a credit recession in so long, so when we have one, it will be worse than people think,” Dimon said.
(Reporting by Saeed Azhar in New York, Gwladys Fouche in Oslo and Manya Saini in Bengaluru; Editing by Chizu Nomiyama and Maju Samuel)
