Jamie Dimon, CEO of JPMorgan Chase, has issued a stark warning about the economic risks of President Donald Trump’s sweeping tariffs, stating they could trigger a recession and spark a wave of borrower defaults.
Speaking on Fox Business’s Mornings with Maria, Dimon linked the growing uncertainty in markets to a toxic mix of rising interest rates, persistent inflation, and widening credit spreads—conditions that can rapidly undermine financial stability.
“So long as you have rates going up... inflation is sticky and credit spreads are gapping out, which they're going to, I think you'll see more credit problems,” he said.
Key Points from Dimon's Comments
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Recession Warning: JPMorgan now places the chance of a US and global recession in 2025 at 60%, up from 40%, directly citing the impact of US-imposed tariffs.
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Credit Risk: As credit spreads widen and borrowing becomes costlier, defaults could rise, affecting both corporate and retail borrowers.
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Sticky Inflation: Despite policy moves, inflation remains stubborn, which limits the Fed's ability to aggressively cut rates and ease market pressures.
Trade Negotiations Urgently Needed
Dimon emphasized the importance of rapid diplomatic progress:
“If they want to calm down markets, show progress on those things,” he said, referring to ongoing trade talks led by US Treasury Secretary Scott Bessent.
He cautioned that unless a breakthrough is reached:
“It could get worse if we don’t make some progress here.”
Markets React Sharply
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US stock futures fell sharply after China retaliated, announcing that it will increase tariffs on all US goods to 84% (from 34%) starting April 10.
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The escalation has spooked investors, with markets bracing for a full-blown trade war between the world’s two largest economies.
Dimon’s Annual Letter: More Warnings
In his recent annual shareholder letter, Dimon described the economic environment as facing "considerable turbulence" and warned that tariffs could have lasting negative consequences.
He remains one of the most respected voices in corporate America and was even floated as a potential Treasury Secretary during the 2024 campaign—though he chose to stay at JPMorgan.
Summary
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Jamie Dimon warns of a likely recession due to Trump’s tariff policies.
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JPMorgan raises global recession risk to 60%.
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Markets tumble following China's retaliatory tariff hike.
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Dimon urges quick progress in trade negotiations to avoid further economic damage.
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Stresses that credit risk and inflation are worsening alongside rising rates.
