It is a huge mistake to think that the economy will flourish for years

Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., speaks during the Annual Membership Meeting of the Institute of International Finance (IIF) in Washington, D.C., United States, on Thursday, October 13, 2019. 13, 2022.

Ting Shen | bloomberg | Getty Images

Jamie Dimon, CEO of JPMorgan Chase Bank, said on Monday that although the US economy is doing well, it would be a “huge mistake” to think it would last for years.

Healthy consumer balance sheets and rising wages support the economy, the executive said, but there are risks ahead, including central banks curbing liquidity programmes, the Ukraine war and governments around the world “spending like drunken sailors”.

Dimon, head of the largest US bank by assets, was speaking at a financial conference in New York.

“To say that the consumer is strong today, which means you will have a booming environment for years, is a huge mistake,” he said.

The world’s largest economy has defied predictions in the past year, including forecasters like Dimon. Last year, he warned that a potential economic hurricane was on the way, citing the same concerns about central banks and the conflict in Ukraine. But the US economy has proven resilient, leading more economists to predict that a recession can be avoided.

Dimon said that while JPMorgan and other banks had been “overprofiting” from lending for years because of historically low default rates, pressures were emerging in parts of real estate and mortgage auto lending.

“If and when you have a recession, which you eventually will, you will have a real natural credit cycle,” Dimon said. “In a normal credit cycle, it’s almost always worse than expected,” he added.

Damon sounded a note of caution throughout the panel discussion. He said JPMorgan is buying back shares at a lower level than before, a pace that could continue into 2024.

“I think the uncertainties that lie ahead are still very large and very serious,” Dimon said.

He added that among those risks is the deterioration of relations with China.

“I don’t expect a war in Taiwan, but this could go south,” Dimon said.

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