JPMorgan Chase CEO Jamie Dimon called the U.S. stock market “somewhat bloated,” even as he urged critics to “get over” their fears about President Trump’s proposed tariffs.
In an interview Wednesday with CNBC at the World Economic Forum in Davos, Switzerland, Dimon warned investors of the risks of increased deficit spending, persistent inflation and geopolitical tensions.
“Asset prices are somehow inflated by any measure. They’re in the top 10 or 15 percent of historical valuations, Dimon said.
The 68-year-old chief executive said he was talking specifically about the U.S. stock market – which has posted record gains during a multi-year bull run.
Last year and into 2023, the S&P 500 posted annual gains of more than 20% – the first time the U.S. stock market has seen back-to-back gains of this magnitude in 25 years. Last year, Dimon even said that JPMorgan shares were too expensive.
Dimon also pointed out that parts of the bond market, such as the country’s sovereign debt, are “at unprecedented levels.”
“So yes, they are high, and you need pretty good results to justify those prices,” Dimon said at the conference. “Having growth-friendly strategies helps achieve this, but there are negative aspects, and they can tend to surprise you. »
Meanwhile, Dimon chastised critics of Trump’s proposed heavy tariffs on China, Mexico and Canada, telling them to “get over it.”
Tariffs can be “an economic tool” or “an economic weapon,” depending on how they are used, Dimon said.
“I would put it in perspective: if it’s a little inflationary, but it’s good for national security, so be it,” he added. “I mean, get over it.”
In his first days in office, Trump doubled down on threats to impose significant tariffs – including 10% tariffs on Chinese imports and 25% tariffs on goods from Mexico and Canada, which will come into force on February 1.
Economists and business leaders have warned that tariffs could once again fuel inflation, particularly in combination with mass deportations.
But Dimon showed greater confidence in Trump’s plan, saying tariffs can be used as a negotiating tool to “bring people to the table.” He said he believed the Trump administration was using threats that way.
This isn’t the first time Dimon has supported Trump, saying shortly after the president’s election victory that Wall Street bankers were “dancing in the street” in hopes that Trump would ease industry regulations.
If the threats are simply a bartering tool, as Dimon suggests, then the United States could impose lighter tariffs on China, Mexico and Canada, or no new tariffs at all.
“We’ll find out,” Dimon said.
During his first term, Trump imposed tariffs on products like solar panels and washing machines, as well as materials like steel and aluminum. He also increased tariffs on goods from China.
Despite Dimon’s more optimistic attitude regarding the proposed tariffs, he was long hesitant to claim victory over inflation.
In 2022, the chief executive – who built JPMorgan Chase into the largest US bank by assets and market valuation – warned that a “hurricane” was headed for the US economy.
“I’m a little more cautious on a number of issues,” Dimon said at the World Economic Forum. “What I’m a little cautious about is deficit spending; This is a global problem, not just an American problem.
He also stood by his previous statements on inflation, predicting it could be here to stay.
“‘Will inflation go away?’ I’m not so sure,” Dimon said.
He said global concerns, such as the war in Ukraine, tensions in the Middle East and threats from China, “have made me very worried about how this is going to affect our world over the next 100 years.” .
