Dimon: Iran War Fuels Inflation, Interest Rates

Dimon, who has led JPMorgan for two decades, cited geopolitical risks including the war in Ukraine, broader Middle East hostilities, and tension with China, alongside the Iran conflict. He stated the U.S. economy remains resilient with consumers earning and spending, and businesses healthy, but noted it is fueled by substantial government deficit spending and past stimulus.

Dimon also identified positives such as Trump's "One Big, Beautiful Bill Act," deregulation, and AI-driven capital spending. Regarding the US$1.8 trillion private credit market, Dimon concluded it probably does not present a systemic risk, but cautioned that losses on leveraged lending will be higher than expected when the credit cycle weakens due to declining credit standards and poor transparency.

He sharply criticized proposed revised capital rules for U.S. banks, calling aspects "nonsensical" and "absurd," specifically JPMorgan's 5.0 percent GSIB surcharge. War-driven inflation concerns have already led markets to largely rule out interest rate cuts this year, with the S&P 500 index closing its worst-performing quarter since 2022.