Jamie Dimon says ‘beware’ as high asset prices increase economic risks: ‘My fear is high’

Even as economists tout the Trump administration’s tax and deregulation policies as a boost to economic growth this year, Dimon said at an annual investor update that his own tendency was to think about what could go wrong when expectations are high.

“My own view is that people are feeling somewhat comfortable that this is real, these high asset prices and high volumes, and that we’re not going to have any problems,” said Dimon, who was dressed in black and wore a brace on one of his hands.

It is inevitable, Dimon said, that the economic cycle will turn, leading to a wave of borrower defaults that will have major consequences for lenders, and often for industries that few people expect, he said.

“There will be a cycle one day… I don’t know what confluence of events will cause that cycle. I’m very concerned about it,” Dimon said. “I’m not reassured by the fact that asset prices are high. In fact, I think it increases risk.”

While fears about how artificial intelligence models from Anthropic and OpenAI could disrupt a host of industries — especially software companies — have roiled markets in recent weeks, the broader S&P 500 isn’t far from its all-time high.

At the same time, concerns about lending to software companies at the intersection of AI concerns have toppled private lenders after Blue Owl spooked markets last week when it announced it would have to sell assets to satisfy investors clamoring to exit one of its funds.

The episode, which dragged down the shares of larger alternative asset managers, including Apollo, KKR And Blackstoneled some market observers to wonder if the beginning of a broader downturn in the field of credit had begun.

“There’s always a surprise in a credit cycle,” Dimon said. “The surprise was often which sector” was most affected, he said. “You wouldn’t have expected utilities and phone companies in ’08 and ’09, and this time it could be software, because of AI.”

Dimon also said he endorsed his deputies’ comments on private credit from earlier in the investor event.

Troy Rohrbaughco-head of the company’s commercial and investment bank, said he did not think the problems were likely to be limited to private lenders but would instead be “broader based.”

“Right now it feels a little isolated in a handful of situations, but that could change pretty easily, and we’re prepared for that,” Rohrbaugh said.

In response to a question from veteran banking analyst Mike Mayo, Dimon said the current environment was similar to the three years leading up to the 2008 financial crisis in that “everyone is making a lot of money, people were taking advantage of the money, the sky was the limit.”

The head of JPMorgan said some financial companies were “doing stupid things” related to chasing interest income, which is earned through lending and investing activities, although he did not name which companies did so.

“It makes you feel stupid when everyone is coming up with money and everyone is great… it feels really good,” Dimon said.

“And then when I think about all the factors that are taking place,” Dimon added, “I take a deep breath and say, ‘Be careful.’”

Dimon also addressed the perennial issue of CEO succession at JPMorgan, which he built into the world’s largest bank by market capitalization during his two-decade tenure.

While he has often given a specific time frame for how many years he had left as CEO, he avoided doing so on Monday.

“I was told to say this very specifically,” Dimon said, spreading laughter among the analysts in attendance. “I’ll be here for a few years as CEO, and maybe a few more years as executive chairman.”