Jamie Dimon, head of JP Morgan Chase, says the risk of a sharp fall in U.S. stock prices is higher than most investors realize. Speaking to the BBC, he warned that the market could see a serious downwards correction within the next six months to two years.
Dimon said he is “far more worried than others” because of so many uncertainties like rising global tensions, high government spending, and the worldwide push for rearmament. He said people should expect more instability than usual.
He compared today’s tech-driven stock surge to the dotcom boom of the 1990s, saying that while AI is real and will have long-term benefits, many investors will lose money. “AI will pay off like cars and TVs did,” he said, “but most people involved won’t make money.”
Dimon also warned about global security, saying nations should be stockpiling “bullets, guns, and bombs” instead of focusing on cryptocurrencies. He noted that the U.S. could run out of missiles in a week if a war broke out in the South China Sea.
On U.S. politics, Dimon said he believes the Federal Reserve will stay independent despite President Trump’s public criticism of its chair, Jerome Powell. He admitted the U.S. had become “a little less reliable” but credited some Trump policies for pushing Europe to boost defense spending.
He added that trade talks between the U.S. and India are progressing, and that tariffs on Indian goods could soon be reduced. When asked about a political career, Dimon laughed and said it was “not on the cards,” though he added, “If you gave me the presidency, I’d take it.”
The Bank of England has also warned that global markets could face a “sudden correction” because of soaring values in leading AI technology companies. It also said a “sharp repricing of US dollar assets” could occur if investors lose confidence in the Federal Reserve, which is under political attack from Donald Trump.
AI optimism has driven stock market valuations of tech companies to record highs. OpenAI is now valued at $500 billion, up a massive $157 billion in the last 12 months alone, while Anthropic’s value has nearly tripled to $170 billion in just a few months.
Gold prices have hit record highs this week, suggesting that investors are already looking for a safe haven for their money.
Sources: BBC, The Guardian.
