Inflation, polarisation, wars creating risks not seen since WWII: Dimon

Jpmorgan Chase CEO Jamie Dimon said on Monday that he continues to expect the US economy to be resilient and grow this year. But he worries geopolitical events including the war in Ukraine and the Israel-hamas war, as well as US political polarisation, might be creating an environment that “may very well be creating risks that could eclipse anything since World War II.”

“America’s global leadership role is being challenged outside by other nations and inside by our polarised electorate,” Dimon said. “We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy.” Dimon had particular concerns with continued large amounts of deficit spending by the US government and other countries, as well as the need for countries such as the US to remilitarise and continue to build out green infrastructure, all of which will likely keep inflation higher than investors expect.

Because of these issues, Dimon said he is less optimistic that the US economy will achieve a “soft landing,” which he defined as modest growth along with declining inflation and interest rates, compared to the broader market. While he says the investors are pricing in a “70 per cent to 80 per cent” chance of a soft landing, Dimon thinks the chances of such an ideal outcome are “a lot less” than that.

“WE ARE CONVINCED THE CONSEQUENCES (OF AI) WILL BE POSSIBLY AS TRANSFORMATIONAL AS SOME MAJOR TECHNOLOGICALINVENTIONSOFTHEPAST” JAMIE DIMON, CEO, Jpmorgan Chase

Dimon said he sees promise in the use cases of artificial intelligence. The bank has found 400 use cases for AI so far, Dimon said, particularly in the bank’s marketing, fraud and risk departments.

“We are completely convinced the consequences (of AI) will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others.”