Dimon Says He Wouldn’t Buy Stocks or Long-Term Treasuries, Warns Markets Underprice Risks

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said investors are underestimating the risks facing the global economy and that, at current prices, he would not buy stocks or long-term US Treasuries.

In an interview with CNBC on July 20, Dimon said markets are not fully pricing in geopolitical and fiscal threats. He cited the war in Ukraine, the war involving Iran, US-China tensions and rising military spending as government budget deficits widen.

His comments contrast with a market that has largely shrugged off recent shocks from war and tariffs. With consumer spending still holding up, the S&P 500 has risen about 8% this year. Major US banks, including JPMorgan, last week reported quarterly earnings that beat expectations, helped by strong trading and investment-banking results. CNBC said that reinforced the market view that the US economy has remained more resilient than initially feared despite recent geopolitical instability. Dimon said the global economy is indeed more resilient than in the past because it is less dependent on energy, but warned that the risk of a sudden turning point has not disappeared.

Dimon said the US chronic fiscal deficit will eventually become a problem. He expects interest rates to rise as so-called bond vigilantes demand higher yields in return for absorbing government debt. Asked whether he would buy long-term Treasuries, Dimon said he would not. Even if inflation falls below the Federal Reserve’s 2% target, he said the 10-year Treasury yield would remain in a 4.0% to 4.5% range. That leaves little room for Treasury prices to rise.

He was also cautious on stocks. While he would consider individual companies if he found attractive opportunities, Dimon said he would not buy the broader market at current valuations.

Dimon also compared the current boom in artificial-intelligence investment with the early days of the internet industry. He said the amount of money flowing into AI is enormous and that, as with the internet industry before, it will ultimately produce investment returns. Still, he pointed to the decline of early internet leaders such as Yahoo and Netscape. “If you ask whether investments will pay off in the way people expect and on the timeline they expect, absolutely not,” he said.

Han Myeong-hyeon, Hankyung.com reporter, wise@hankyung.com