US stock market crash risk is high, warns JPMorgan boss
What's the story
Jamie Dimon, the chair and CEO of JPMorgan Chase, has warned that the risk of a major correction in the US stock market is much higher than many financiers think. He said he was "far more worried than others" about such a scenario, which he predicts could happen in six months to two years.
Market forecast
'Major market correction more likely than what the market thinks'
In an interview with the BBC, Dimon said he would give a higher probability to a major market correction than what is currently priced in by the market and others. "So if the market's pricing in 10%, I would say it is more like 30%," he said. He attributed this uncertainty to several factors, including geopolitical tensions, fiscal spending, and global remilitarization.
Global concerns
Dimon highlights uncertainty from geopolitical tensions
Dimon stressed that these factors create a lot of issues we don't know how to answer. He said, "So I say the level of uncertainty should be higher in most people's minds than what I would call normal." His comments come amid growing fears that high valuations of AI companies have created a stock market bubble.
AI caution
AI investments could lead to significant losses
Dimon admitted that some of the money being invested in AI would "probably be lost." He said, "The way I look at it is AI is real; AI in total will pay off - just like cars in total paid off, and TVs in total paid off, but most people involved in them didn't do well."
Policy priorities
Dimon calls for central bank independence, stronger defense preparedness
Dimon stressed the importance of central bank independence and stronger defense preparedness. He said he was willing to take Donald Trump "at his word" that he wouldn't interfere with the US Federal Reserve, despite Trump's past criticism of Fed Chair Jerome Powell. On global security, Dimon had previously warned in his annual letter to shareholders that the US could run out of missiles within a week if conflict broke out in the South China Sea.