JPMorgan CEO Jamie Dimon issued an inflation warning in Trump tariffs: “The faster you solve this problem…”
JPMorgan Chase & Co. CEO Jamie Dimon warned that recent reciprocity tariffs on U.S. President Donald Trump could lead to inflation in the country.
In an annual letter to shareholders of the week, Dimon said recent U.S. tariffs could also lead to fears of an upcoming recession.
“Recent tariffs could increase inflation and cause many to consider a greater possibility of a recession,” he said.
Jamie Dimon also warned that the market’s price valuation is still relatively high, which is another reason for caution.
“Even with market value falling, prices are still relatively high. These important and some unprecedented forces keep us very cautious. All of this has more details in the third section.”
JPMorgan CEO flag “turbulence”
The CEO also marked that economic turmoil has been around due to these factors.
“The economy is facing considerable turmoil (including geopolitics), potential enthusiasm for tax reform and deregulation and potential negative effects of tariffs and the “trade war”, persistent sticky inflation, high financial deficiencies and asset prices and volatility remain high,” he said.
The short-term impact of Trump tariffs
Jamie Dimon continued his letter to shareholders saying the tariffs would have important short-term impact.
“As for the short term, as input costs rise and demand for domestic products increases, we may see inflation results, not only imported goods, but domestic prices. The role of this on different products will depend in part on their alternativeness and price elasticity.”
Dimon further pointed out that tariffs will slow growth, although the recession remains a problem.
“Whether the tariff menu causes the recession remains, but it will slow growth.”
JPMorgan CEO wants quick fix
In the letter, Dimon asked for a quick solution to the problem.
“The faster this problem is solved, the better, because some of the negative effects will accumulate over time and are difficult to reverse. In the short term, I think it’s a big straw on the camel’s back.”
He cited a list of lingering issues regarding the new policy, including potential retaliation actions in other countries, the impact on investment and capital flows, and the possible impact on the dollar.
Still, he hopes to achieve a positive result for the United States in negotiations.
“I hope that after negotiations, the long-term impact will have some positive benefits for the United States. My worst concern is how to affect the long-term economic alliances in the United States,” he said.
