It’s a big mistake to think that the economy will boom for years

JPMorgan Chase CEO Jamie Dimon said Monday that while the U.S. economy is doing well, it would be a “huge mistake” to think it will last for years.

Healthy consumer balance sheets and rising wages are supporting the economy for now, but risks loom, said Dimon, speaking at a financial conference in New York. Among his biggest concerns are limiting central banks’ liquidity programs through “quantitative tightening,” the war in Ukraine and the fact that governments around the world are “spending like drunken sailors,” the executive director said.

“To say that the consumer is strong today means there will be a booming environment for years to come is a big mistake,” he said.

The world’s largest economy defied expectations of a downturn last year, including from forecasters like Dimon, head of the largest U.S. bank by assets. Last year he warned that a possible economic hurricane was on the horizon, citing the same concerns about central banks and the Ukraine conflict. But the U.S. economy has proven resilient, leading more economists to believe a recession could be avoided.

While JPMorgan and other banks have been making “too much money” on lending for years because of historically low default rates, tensions were emerging in parts of real estate and subprime auto lending, Dimon said.

“If you have a recession, which you’re going to have at some point, you’re going to have a really normal credit cycle,” Dimon said. “In a normal credit cycle, something always goes worse than expected,” he added.

Dimon was cautious throughout the panel discussion. JPMorgan is buying back shares at lower levels than before, a pace that could continue through 2024, he said.

“I think the uncertainties that lie ahead are still very large and very dangerous,” Dimon said.

Those risks include deteriorating relations with China, he said.

“I don’t expect war in Taiwan, but it can go wrong,” Dimon said.

This story is developing. Please check back for updates.