In a year where Americans are anxiously waiting for interest rates to drop, the CEO of the world’s largest bank warns rates may go even higher than they are today and don’t count out a recession. There are two CEOs in this country whose annual letters to shareholders are more widely anticipated than the rest: Warren Buffett and Jamie Dimon.
JPMorgan Chase CEO Dimon’s April 8 letter pours water on investor enthusiasm that the Federal Reserve can orchestrate lower inflation while still growing the economy.
“These markets seem to be pricing in at a 70% to 80% chance of a soft landing…I believe the odds are a lot lower than that,” he wrote. “Therefore, we are prepared for a very broad range of interest rates, from 2% to 8% or even more, with equally wide-ranging economic outcomes — from strong economic growth with moderate inflation…to a recession with inflation; i.e., stagflation.”
Dimon said stagflation is the worst-case scenario.
From CEO to politico?
“I love my country. Maybe one day I’ll serve my country in one capacity or another. But I love what I do,” Dimon told Bloomberg in May 2023.
Dimon’s annual letter comes at a time when people are floating his name as a possible pick for Treasury secretary should Donald Trump win the election. For years, people in political circles have questioned whether Dimon has political ambitions.
Dimon is not an ardent supporter of Trump and in November 2023, he encouraged people to back Trump’s opponent, Nikki Haley.
“Even if you’re a very liberal Democrat, I urge you, help Nikki Haley, too. Get a choice on the Republican side that might be better than Trump,” he said.
I love my country. Maybe one day I’ll serve my country in one capacity or another.
Jamie Dimon, JPMorgan Chase CEO
By January 2024, though, he was praising Trump’s policies, from NATO to immigration to economic growth. And in his letter advocating for U.S. support of Ukraine, he even italicized a Trump phrase, “America first.”
“My heart is Democratic but my brain is kind of Republican,” he said in 2019.
AI as transformational as the internet
When it came to listing the most important issues facing JPMorgan Chase, one easily rose to the top of the list: AI.
“We are completely convinced the consequences will be extraordinary,” Dimon wrote.
He said artificial intelligence could be as transformational as the printing press, the steam engine, electricity, computing and the internet.
Dimon said JPMorgan Chase currently employs more than 2,000 AI-machine learning experts and data scientists. And his predictions on how it will transform their workforce ripple throughout the economy.
“Over time, we anticipate that our use of AI has the potential to augment virtually every job, as well as impact our workforce composition. It may reduce certain job categories or roles, but it may create others as well,” he wrote.
He said affected employees would be retrained and redeployed, a task that’s also front of mind for tech giants. A group of them, including Google, Microsoft, IBM and Intel, are aiming to upskill or reskill 95 million workers in the next 10 years whose jobs AI threatens.