Jamie Dimon warns US economy faces major risks from inflation, Russia-Ukraine war

Ukraine war, inflation poses fresh risks to US economic outlook, Jamie Dimon says

JPMorgan Chase CEO Jamie Dimon warned in his annual shareholder letter that the U.S. economy faces a potential convergence of unprecedented risks in the year ahead that have him preparing for the worst. 

Although the economy remains in good health, the head of the nation's largest bank said that the Russian war in Ukraine could collide with sky-high inflation and an increasingly hawkish Federal Reserve this year to slow growth and reshape the world for years to come. 


"They present completely different circumstances than what we’ve experienced in the past—and their confluence may dramatically increase the risks ahead," Dimon said. "While it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes."

Jamie Dimon JPMorgan

JPMorgan Chase CEO Jamie Dimon speaks at the North America's Building Trades Unions (NABTU) 2019 legislative conference in Washington, U.S., April 9, 2019.  (Reuters / Reuters Photos)

The outlook has shifted considerably since Dimon wrote the closely watched letter to shareholders last year in which he said an economic "Goldilocks moment" could last until 2023. At the time, the economy was on the upswing as vaccination rates increased, more Americans ventured out to shop, eat at restaurants and travel and the government approved another influx of federal relief money. 

But since then, American consumers have confronted the fastest inflation spike since 1982 as the price of everyday goods including food, gasoline and cars surges higher.


Gas prices are advertised at over five dollars a gallon Monday, Feb. 28, 2022, in Los Angeles.  (AP Photo/Marcio Jose Sanchez / AP Newsroom)

"In hindsight, the medicine…was probably too much and lasted too long," Dimon wrote, referring to the trillions in pandemic-era stimulus measures that padded consumers' wallets and helped to keep businesses afloat.

The outbreak of the worst European conflict in decades has also roiled markets and threatened to push inflation even higher – in addition to creating a massive humanitarian crisis that has left more than 13,000 dead and millions displaced.

"Along with the unpredictability of war itself and the uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation," Dimon said. 

Dimon said that he is not concerned about JPMorgan's direct exposure to Moscow – though he disclosed the company stands to lose about $1 billion "over time" from its businesses in Russia. 

In this Jan. 29, 2020 file photo, Federal Reserve Chair Jerome Powell pauses during a news conference in Washington. (AP Photo/Manuel Balce Ceneta, File / AP Newsroom)

Finally, the chief executive said that the Federal Reserve poses a risk to the economy, saying the central bank could move interest rates "significantly higher than the markets expect." 


Fed policymakers began raising rates last month and have penciled in six, similarly sized increases this year. But officials have since suggested they could move more aggressively to tighten policy amid concerns the Fed waited too long to confront sky-high inflation.  

"This process will cause lots of consternation and very volatile markets," Dimon added.