Jamie Dimon says inflation is worse than people think, and that the market is too optimistic about a soft landing

CNBC/Jamie Dimon

Inflation be higher for longer than people think because of multiple factors, JPMorgan CEO Jamie Dimon told Bloomberg TV.
Markets are too optimistic about inflation, interest rates, and the US economy, Dimon said.
“I think the chance of inflation staying high or rates going up are higher than people think,” he said.

Markets underestimate inflation’s likely endurance, as an array of factors keep price upside churning, JPMorgan CEO Jamie Dimon told Bloomberg TV.

“I think the underlying inflation may not go away the way people expect it to,” he told the outlet at the JPMorgan Global Markets Conference. He added: “I think there are a lot of inflationary forces in front of us that may keep a little bit higher than people expect.” 

Looking to the future, Dimon listed examples such as the green energy transition, infrastructure buildout, and geopolitical remilitarization as worrying sources of accelerating price growth. 

Upcoming policy changes could also play a role here: rising trade restrictions or continued fiscal overspending could propel price momentum.

It’s a point Dimon keeps reiterating despite market bullishness, as investors keep trading on the premise that subsiding inflation allows interest rates to eventually ease.

To Dimon, this “a lot of happy talk,” he said simply. In his view, chances that monetary policy stays unchanged — or that it tightens — are higher than most expect. What’s more, soft landing hopes should be half of what they are, he added.

But in Bank of America’s latest Global Fund Manager survey, positivity did shine through. In fact, Tuesday’s report marked the highest bout of investor optimism since late 2022, brought on by rising confidence in interest rate cuts this year. 

Dimon’s push back has been ongoing. In his annual letter to JPMorgan shareholders published last month, he expressed similarly doomy outlooks concerning inflation, interest rates and the economy’s trajectory. Geopolitical tensions are also worrying the bank’s head, he then said.

But recently, he’s offered calming rhetoric when it comes to at least one global competitor: China. On this front, Dimon has argued that the US should not shy away from competitive engagement with Beijing, despite the country’s growing ties to Russia. 

“Engagement is the right thing to do. China is not a natural enemy to the United States, they have a lot of their own problems. So to me, we can work together as best we can,” he told Bloomberg.