The executive director of JPMorgan Chase, Jamie Dimonwarned of an elevated risk of a significant correction in the US stock market within the next few years. six months to two yearspointing out that there are multiple factors of uncertainty that could alter the global economic course.
“I’m much more worried about it than others,” Dimon said in an interview with the BBC, in which he listed the main sources of tension: geopolitical conflicts, expansive fiscal spending and a process of global remilitarization which, according to him, “creates an environment full of risks.”
“All these things generate many problems for which we do not have answers,” the banker warned, noting that the US market faces growing signs of overheating.
Overvalued market and rise of artificial intelligence
Dimon expressed a moderate concern about inflationalthough he defended the independence of the Federal Reserve in the face of pressure from President Donald Trump on Jerome Powell.
The executive also referred to the rise of artificial intelligence (AI) as one of the drivers behind recent stock market rallies, but warned that enthusiasm could be pushing valuations to unsustainable levels.
“AI is real and, overall, it will pay off. But, as happened with cars or televisions, most of those who participated in those industries did not do well at the beginning,” said Dimon, anticipating that part of the capital invested in AI will probably be lost.
His statements coincided with a report by Bank of Englandwhich compared the current optimism for AI with the dotcom boom of the late 90s, warning about the possibility of a strong correction in technology valuations.
Concern for global security
Beyond the financial level, Dimon reiterated his concern about the international securityrecalling his warning at the beginning of the year about the defense capabilities of the United States.
“The world is a much more dangerous place. People talk about storing cryptocurrencies, but I always say that we should store bullets, guns and bombs,” said the banker, noting that military readiness and national security should be priorities.
In his annual letter to shareholders, Dimon had already warned that The United States could run out of missiles in a week in case of a conflict with China in the South China Sea.
Fed independence and political tensions
Asked about Donald Trump’s criticism of the head of the Fed, Jerome Powell, whom the former president called a “fool” for not cutting rates more quickly, Dimon defended the independence of the central bank and said he was willing to believe Trump when he assures that he will not intervene in monetary policy.
Likewise, he recognized that The United States has become “a little less reliable” in recent years, although he considered that part of the actions of the North American Government served to push Europe to increase your investment in defense and competitiveness.
Source: Ambito
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