Catenaa, Thursday, May 22, 2025- JPMorgan Chase Chairman Jamie Dimon said stagflation risk can’t be ruled out for the US economy as the country faces huge risks from geopolitics, deficits and price pressures.
Speaking to Bloomberg on the sidelines of the lender’s Global China Summit in Shanghai on Thursday, he said they don’t agree that the US is in a sweet spot and added that the US Federal Reserve is doing the right thing to wait and see before they decide on monetary policy.
Fed officials have held interest rates steady this year amid a solid economic backdrop and uncertainty about government policy changes, like tariffs, and their potential impact on the economy. Policymakers have said they see an increased risk of confronting both higher inflation and unemployment.
Dimon said that the US government doesn’t want to leave China with the current tariff levels and that there could be more rounds of talks coming in before settling.
Earlier this month, the US and China agreed to sharply reduce tariffs for 90 days to hammer out a new agreement, in what promises to be difficult rounds of talks between Washington and Beijing.
US President Donald Trump’s tariffs on China will likely remain at a level expected to severely curtail Chinese exports after the 90-day truce, analysts and investors say.
JPMorgan, among others, have indicated that the uncertainty from Trump’s policies may cause clients to sit on the sidelines.
Dimon also added that the US has to “attack the deficit problems,” and he also understands why investors may be cutting US dollar assets.
US Treasuries on Wednesday extended their recent selloff, with longer-term securities getting hit the hardest and an auction of 20-year debt receiving a relatively tepid reception.
The selloff at one point pushed the yield on the 30-year bond up by as much as 13 basis points to almost 5.10%, its highest level since 2023. Treasuries were little changed in Asia trading on Thursday.
“I don’t worry about short-term fluctuations in the dollar,” Dimon said. “But I do understand people might be reducing dollar assets.
