In This Story
JPMorgan Chase (JPM) chief executive Jamie Dimon didn’t mince words about the complex global geopolitical landscape.
“We have been closely monitoring the geopolitical situation for some time, and recent events show that conditions are treacherous and getting worse,” Dimon said in the Wall Street giant’s third-quarter earnings report Friday. “There is significant human suffering, and the outcome of these situations could have far-reaching effects on both short-term economic outcomes and more importantly on the course of history.”
Dimon has long warned about the dangers of escalating geopolitical conflicts. In the company’s third-quarter report last year, Dimon similarly remarked that it was “the most dangerous time the world has seen in decades.”
While the CEO didn’t name any particular issues in Friday’s report, in the past Dimon has pointed to the Russia-Ukraine war and escalating tensions in the Middle East.
JPMorgan reported another blowout quarter Friday, topping Wall Street expectations thanks to higher-than-expected net interest income. The largest U.S. bank by assets booked reported revenue of $42.7 billion and net income of $12.9 billion, or $4.37 per share. Net interest income, a key way banks make money and a metric that’s highly sensitive to interest rates, was $23.5 billion, up 3% on the year.
Dimon laid out “several critical issues” that could impact the U.S. economy, including large fiscal deficits, infrastructure needs, restructuring of trade, and the remilitarization of the world.
“While we hope for the best,” he said, “these events and the prevailing uncertainty demonstrate why we must be prepared for any environment.”
U.S. federal debt, which topped $35 trillion this year, has been at the forefront of Dimon’s warnings about the economy in recent months. The 68-year-old has warned that ballooning government debt is, by nature, inflationary, and could throw a damper on the Federal Reserve’s plans.
In its updated Summary of Economic Projections, the Fed cut its outlook for core Personal Consumption Expenditures, the central bank’s preferred inflation metric, for the rest of the year, to 2.3% from its 2.6% projection in June. It also lowered its forecast for next year to 2.1% from 2.3%.
At an event last month, however, Dimon said that he’s “a little more skeptical that inflation is going to go away so easily.” And when it comes to a soft landing, Dimon is far less optimistic than the Fed.
“I wouldn’t count my eggs,” he said in September, referring to the potential of an economic soft landing next year. Dimon has previously said he believes there’s a 35% to 40% chance that the U.S. will see a soft landing for the economy.
