It could be reassuring for markets to listen to Jamie Dimon, the chief of America’s largest financial institution and a veteran of Wall Road, say he didn’t see a recession coming. Sadly, that’s not the case.
In his a long time main JPMorgan Chase, Dimon’s financial opinion has been seen as a barometer for the well being of the U.S. financial system. However those that comply with Dimon additionally know he conducts rigorous stress testing at JP, ensuring the establishment can face up to a variety of outcomes.
To this finish, Dimon isn’t taking a recession off the desk for subsequent 12 months—although GDP at current is monitoring upwards. In accordance with newest figures, U.S. gross home product elevated at an annual fee of three.8% within the second quarter of 2025.
However there are questions excellent for analysts: Notably these like Dimon who chorus from falling to the overly bullish or bearish aspect. These questions embrace the influence of tariffs on inflation (if or when these will increase really hit), in addition to geopolitics, the labor market, and whether or not AI will ship the returns traders are banking on.
Dimon echoed this warning in an interview this week, saying: “I feel [a recession] may occur in 2026—I’m not frightened about it’s a completely different assertion. We’ll cope with it, we’ll serve our shoppers, we’ll navigate via it. Plenty of us have been via them earlier than.”
Beforehand the billionaire banker has warned the American financial system is weakening, saying in September following a measly jobs report from the Bureau of Labor Statistics that whether or not that weak point spills into financial contraction stays to be seen.
He struck an identical tone this week, saying within the dialog with Bloomberg: “You don’t want it as a result of you realize sure folks get damage,” including: “The way it all kinds out? We’ll see.”
Dimon’s warning is at odds with some tried-and-trusted indicators. The Sahm Rule indicator—which alerts the beginning of a recession when the three-month shifting common of the nationwide unemployment fee is 0.5 share factors better than the minimal of the three-month averages from the earlier 12 months—sits at a snug 0.13%, assisted by a comparatively secure unemployment fee.
Likewise JPMorgan itself wrote earlier this 12 months the percentages of a recession now sit at 40%, although international economist Joseph Lupton did observe within the Could launch that the financial institution expects “materials headwinds to maintain development weak via the remainder of this 12 months.”
Dimon, by no means one to financial institution on one final result or one other, did counter the warning with some causes for optimism: “However I do assume there are positives—like deregulation is an actual constructive, which additionally helps animal spirits … and you realize, within the ‘One Large, Stunning Invoice’ there’s additionally extra stimulus, that has positives for the financial system however possibly unfavorable for inflation.”
Shutdowns are a nasty concept
One factor Dimon is certain on is that the present authorities shutdown isn’t excellent news for anybody. Washington is at the moment locked in a stalemate over funding, with threats lingering over furloughed employees not receiving backpay and doubtlessly even their jobs once they return.
Equally, the vast majority of merchants predict the federal government shutdown to final for greater than 15 days, with 52% anticipating it to pull on for greater than 20. This presents issues for the Fed, which is able to meet in per week to decide on the bottom fee with out key information from federal releases.
“Look, I don’t like shutdowns. I feel it’s only a unhealthy concept—I don’t care what the Democrats or Republicans say, it’s a nasty concept,” Dimon mentioned. “It’s not a technique to run a railroad.”
Even then Dimon, like many others on Wall Road, don’t count on the shutdown to materially influence the financial system: “You realize, one in every of them went for 35 days, I’m unsure … if it actually affected the financial system, the market in an actual method.”
