The CEO of the largest bank in the US warns that markets are buzzing as they trade at record levels.
In a new Bloomberg interview, Jamie Dimon say he sees signs of excesses in the markets.
He also notes that investors appear to be taking more risks despite ongoing geopolitical tensions in Europe and the Middle East.
0:15 “I think there’s a little bit too much exuberance out there. It’s not just the Middle East. It’s Ukraine, Russia, that’s still there, America, China. There are a lot of these complex issues, which may or may not affect the market, but then there are also issues like inflation, and that [latest] print was not that good. But yes, I think the market is quite exuberant, and that may not be entirely justified.”
Earlier this week, the Bureau of Labor Statistics (BLS) reported that the consumer price index (CPI), a popular inflation measure, rose to 3.8% in April, higher than the consensus forecast of 3.7%.
Zooming in, Dimon says strong corporate earnings and AI-driven productivity gains are fueling stock market rallies. He also emphasizes that American consumers are buoyed by the impact of Trump’s One Big Beautiful Bill, amid rising oil prices.
Follow-up “I think corporate profits are doing very well. AI will be a plus. This year it’s just a lot more spending, which may also be a little inflationary. But it’s more corporate profits. We’re doing a little more QE. The government is still spending a lot of money. The One Big Beautiful Bill is coming into effect. The stimulus measures are offsetting a lot of the gas price increase…
The One Big Beautiful Bill costs $300 billion. Deregulation is a fact.”
Despite the prevailing bullish sentiment, Dimon says investors should be prepared should any of the risks he mentioned materialize.
Follow-up “The general assumption is that these things will all be resolved. I’m kind of a skeptic. I hope so, but I don’t know if that’s the case.”
At Thursday’s close, the S&P 500 is trading at 7,501.
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