JPMorgan Chase CEO Jamie Dimon has warned that financial markets may be underestimating mounting geopolitical and fiscal risks, saying he would not buy either stocks or US Treasury bonds at current valuations.
Speaking in an interview with Sky News, Dimon pointed to the wars in Ukraine and the Middle East, rising tensions between the US and China, and growing government deficits alongside higher military spending as key risks facing global markets.
"I do think those risks are probably bigger than other people think," Dimon said.
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Asked whether investors are adequately pricing in the possibility of a major market shock, the JPMorgan chief said it is difficult to determine what is already reflected in asset prices.
"It is possible something is baked in, but what is not baked in is what actually happens," he said.
Dimon acknowledged that the global economy is more resilient than in previous decades because of lower dependence on energy. However, he cautioned that resilience does not eliminate the possibility of a sharp market inflection following the selloff seen earlier this year.
On equities, Dimon said he could still buy an individual company if it represented "a great investment," but added that he would not be a buyer of the broader equity market at current valuations. He also said he would stay away from US Treasury bonds at current levels.
The JPMorgan CEO also expressed caution over the scale of artificial intelligence investments by hyperscale technology companies. "The amount of money being spent is huge. Will it in total pay off? Probably, just like the internet did," Dimon said. "Will it pay off the way you expect and the timetable you expect? Definitely not."
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Dimon's comments come as geopolitical tensions in the Middle East continue to intensify. Oil prices have climbed after the fragile ceasefire between Iran and the US broke down, while Yemen's Iran-aligned Houthis threatened a naval blockade on Saudi Arabia, raising fresh concerns over global energy supplies and trade.
Separately, Goldman Sachs recently warned that Brent crude oil could surge to $120 per barrel if disruptions in the Strait of Hormuz persist, although its base case still assumes tensions will eventually ease.
The remarks also follow a strong earnings season for JPMorgan, which last week reported the highest quarterly profit ever recorded by a US bank.
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