Jamie Dimon warns of deficit, trade risks to US economy

JPMorgan boss Jamie Dimon on Thursday said the US economy continues to face the risk of stagflation due to ballooning deficits, geopolitical tensions and price pressures from President Trump’s trade war.

“There is a chance that with these things you’ll have stagflation,” Dimon said in an interview with Bloomberg while attending JPMorgan’s Global China Summit in Shanghai.

“I am not saying it is going to happen, but we have to be prepared for something like that.”

Stagflation is a term economists use to describe a toxic mix of slow growth, high inflation, and increasing unemployment.

The nation’s top banker sounded the alarm shortly before the House passed a tax and spending bill, saying that the Trump-backed “big, beautiful bill” could help bring stability but is not conducive to deficit reduction.

Dimon also backed the Federal Reserve for its wait-and-see approach before lowering interest rates — something that Trump has hounded the Fed Chair to do immediately.

The new legislation, which now heads to the Senate, is estimated to add $3.8 trillion to the government’s $36.2 trillion in debt over the next decade. Credit rating firm Moody’s last week stripped the US government of its top-tier credit rating over the mounting national debt.

“I think the deficit will be large and probably growing,” Dimon said at a closed-door event in Shanghai, according to audio obtained by Reuters.

Dimon called for “responsibility” in spending, and warned governments could spend money while failing to spur growth.

“It’s not just the United States, but governments have shown an amazing ability to spend your money not wisely, set rules and regulations to slow down growth,” he said.

Dimon said efficient budgeting, planning and investing would drive growth and effectively help reduce the deficit.

“But I don’t think you see it on the big, beautiful bill,” he added.

Dimon did offer praise for the “certainty” brought by passing the legislation, a mix of spending reforms and tax cuts, but warned that future administrations would need to start cutting America’s debt pile.

“The United States is running the largest trade deficit that we’ve ever had in peacetime,” Dimon told Bloomberg. “It will probably add a little bit to that. I still think it’s better that we get certainty around the tax bill.”

“I’d rather get that done. But I do think at one point, America has to attack its deficit problem. That attack isn’t just raising taxes. It’s having proper policies around incentives and growing business.”

Despite not having spoken directly to the commander-in-chief in years, Dimon is seen as something of a Trump whisperer on Wall Street.

One of his recent Fox News interviews is credited with helping convince the administration to soften its stance on reciprocal tariffs.

The White House’s tariff plans have fueled concerns about trade disruptions, inflation, unemployment, and a potential recession.

Dimon and other bank executives have warned that companies are halting expansion plans, including mergers and acquisitions and other investments.

JPMorgan, the nation’s largest lender with nearly $4 trillion in assets under management, generated record revenue in the first quarter, and analysts anticipate another strong showing in the second quarter — even before the full impact of the April tariffs takes hold.

Speculation swirled once more over Dimon’s future at the bank during its investor day on Monday where observers wondered who will eventually take over the reins from the long-serving CEO.

Four names are considered to be in the frame: Marianne Lake, the company’s head of Consumer & Community Banking, co-CEOs of JPMorgan’s investment banking operations, Doug Petno and Troy Rohrbaugh, and Mary Erdoes, who leads its asset and wealth management unit.

A veteran of more than three decades at JPMorgan, chief operating officer Jennifer Piepszak was one of the frontrunners to succeed Dimon until she withdrew from the competition in January, insisting she did not want the top job.