JPMorgan boss Jamie Dimon says storm clouds are gathering for the US financial system as monetary situations tighten

• JPMorgan’s CEO mentioned he sees hassle forward for the US financial system.
• Banking sector woes, a hawkish Fed, and Russia’s invasion of Ukraine make for an unsure macro forecast.

JPMorgan CEO Jamie Dimon warned buyers of looming “storm clouds” forward for the US financial system within the agency’s earnings report on Friday.

The financial institution posted robust outcomes, with report income of $38.3 billion handily beating expectations on the again of upper curiosity earnings due to the US central financial institution’s aggressive financial tightening marketing campaign.

“The U.S. financial system continues to be on typically wholesome footings —customers are nonetheless spending and have robust stability sheets, and companies are in good condition,” Dimon mentioned. “Nevertheless, the storm clouds that we now have been monitoring for the previous 12 months stay on the horizon, and the banking business turmoil provides to those dangers.”

Dimon’s warning on the financial system does not essentially imply robust instances forward for the agency, as buying and selling desks typically thrive on heightened volatility, however the head of the biggest US financial institution remains to be feeling nervous about a number of massive headwinds. Banking sector woes, a hawkish Fed, unsure relations with China, and Russia’s invasion of Ukraine all contribute to an unsure macro forecast, the JPMorgan chairman mentioned.

“The banking state of affairs is distinct from 2008 because it has concerned far fewer monetary gamers and fewer points that have to be resolved, however monetary situations will possible tighten as lenders grow to be extra conservative, and we have no idea if this can sluggish shopper spending,” Dimon mentioned.

He added: “We additionally proceed to observe for doubtlessly greater inflation for longer (and thus greater rates of interest), the inflationary influence of continued fiscal stimulus, the unprecedented quantitative tightening, and geopolitical tensions together with relations with China and the unpredictable struggle in Ukraine.”

JPMorgan inventory shot up 7% in Friday’s session, buying and selling round $138 per share.