On Monday, Jamie Dimon, the head of JPMorgan, stated that the risks associated with new US tariffs, markets, and central banks of other countries are being misjudged. In his view, the risks of rising inflation and even stagflation are not properly reflected in stock prices, which have risen from the lows reached in April.
These remarks came after the Moody’s rating agency downgraded the US credit rating on Friday due to the growing debt burden. Dimon noted that earnings growth forecasts for S&P 500 companies are likely to fall to zero within six months from around 12% at the beginning of the year. Such changes could accordingly lead to a decline in stock prices.
The JPMorgan CEO also pointed out the caution of corporate clients postponing deals. According to Dimon, investment banking revenues may decline in the second quarter of this year, while trading revenues are expected to show moderate growth.