We’re not out of the economic woods yet.
At least not according to JP Morgan JPM CEO Jamie Dimon, who spoke Monday at the bank’s annual investors conference.
The fear and trepidation that markets felt when President Donald Trump first unveiled his tariff plan has only been matched by the exuberance felt since the White House announced a 90-day pause on the tariffs.
Related: Jamie Dimon sends curt 6-word response to tariff war
The Nasdaq is up 18% over the past four weeks, the Dow Jones Industrial Average is up more than 9.3%, and the S&P 5 is up nearly 13% over the same time period.
However, the threat of tariffs still hangs over the heads of every country negotiating with the U.S. and every business in between.
In Dimon’s view, the pause on tariffs doesn’t even begin to rectify the damage Trump’s economic agenda has done to the economy.
“It’s an extraordinary amount of complacency,” Dimon told investors Monday, according to the Wall Street Journal.
Investors have been on a roller coaster ride since the White House unveiled its tariffs.
Image source: Triballeau/AFP via Getty Images
Jamie Dimon believes markets have been snookered
Dimon has flip-flopped his position on tariffs recently.
In January, he advised investors to ”just get over it” and stop complaining about tariffs because they are ”good for national security.”
But it seems the more time Dimon has had to digest that White House talking point, the less true it has become in his own mind.
Now he believes that even the scaled-back version of Trump’s tariffs is ”pretty extreme.”
Dimon also now believes that the risk of an economic slowdown is being underappreciated and that the stock market could easily slump soon as the higher costs for goods finally hit companies’ bottom lines.
Related: Analyst resets recession risk after Jamie Dimon’s message on economy
Tariffs could lead to a 10% market selloff, according to Dimon, as companies lower their earnings estimates. The economic uncertainty could also lead to a credit crunch that would hurt companies accustomed to easy credit access.
Perhaps most concerning about Dimon’s comments is his belief that even central banks will be powerless to prevent the worst-case scenario from happening, should the economy reach the tipping point.
“We have what I consider almost complacent central banks that think they are omnipotent,” Dimon said. “They just set short-term rates.”
Jamie Dimon does an about-face on tariffs
Jamie Dimon is singing a different tune in recent weeks than he was at the beginning of the year when Trump was elected.
Back then, he was telling people complaining about the specter of tariffs to “get over it.”
Even more recently in March, Dimon still wasn’t taking the tariff situation too seriously.
“I don’t think the average American consumer who wakes up in the morning and goes to work…changes what they’re going to do because they read about tariffs,” Dimon said. “But I do think companies might.”
But ever since the actual rollout of the tariffs, Dimon has been more forceful.
On April 9, Dimon warned that things “could get worse if we don’t make some progress here” on tariff negotiations.
“If you want to calm down the markets, show progress in those things, then let Scott [Bessent] take the time,” he said on Fox Business. “Trade deals are very large and very complex. They can’t be done overnight, but you really have to have teams working on them to get them right.”
When asked in that interview if he thought a recession was forthcoming, Dimon said, “Probably that’s a likely outcome.”
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
