JPMorgan Chase CEO Jamie Dimon is once again donning the mantle of economic soothsayer, warning that US equities are teetering on the brink of a major correction. Although he does not foresee an imminent collapse, Dimon believes that a significant downturn could unfold over the next 12 to 18 months. While there is no immediate need to panic, investors should brace for volatility ahead.
In an interview with the BBC, Dimon said he is “far more worried than others” about the fate of Wall Street. He cited a confluence of factors that he believes are setting the stage for a market storm. Key sources of risk include mounting geopolitical tensions, deteriorating fiscal conditions, and what Dimon calls a “global re-militarization.” Combined with high interest rates, these factors paint a dire macroeconomic outlook.
Dimon expressed particular concern over the artificial intelligence investment boom, warning that much of the capital currently pouring into AI is likely to be lost. Although he believes that AI will eventually deliver meaningful returns, he draws a parallel with the early days of the automobile and television industries. These were transformative technologies that changed the world but left many investors empty-handed. In his view, not every venture capitalist will be the next Henry Ford of AI.
His cautionary tone echoes that of the Bank of England, which recently flagged valuations of AI-focused companies as potentially overstretched and vulnerable to a sharp correction.
For now, US equity futures remain indecisive, while the S&P 500 and Nasdaq continue to notch all-time highs, seemingly unfazed by Dimon’s warnings.
The JPMorgan chief also addressed growing concerns about pressure on the Federal Reserve’s independence. While US President Donald Trump has publicly urged Fed Chair Jerome Powell to accelerate interest rate cuts, Dimon said he is willing to take Trump “at his word” that he will not directly interfere with monetary policy. This is a rather optimistic view, especially given Dimon’s prediction of a market crash.
