'Emperor of Wall Street' Dimon Warns Again: "Credit Downturn May Be Worse Than Expected"

Jamie Dimon, CEO of JPMorgan Chase and often referred to as the "Emperor of Wall Street," reiterated on April 28 (local time) that the credit market downturn could turn out to be more severe than expected.

According to Bloomberg and other sources, CEO Dimon made these remarks at a conference hosted by Norway's sovereign wealth fund (NBIM), the largest in the world. He noted that the fact there are more than 1,000 companies in the private lending sector means not all will be able to withstand an economic downturn.

Jamie Dimon, Chief Executive Officer (CEO) of JPMorgan Chase. Photo by Reuters Yonhap News.

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He stated, "Some firms may do very well, but I guarantee not all 1,000 will," adding, "Because of this, and because of lending standards, there hasn't been a prolonged credit downturn for a long time. When one does occur, it will be much more serious than people expect."

He continued, "It won't be a disastrous situation, but in the private credit market, it will be worse than people think," and added, "The same may be true for some banks as well."

Amid growing concerns over potential distress in the USD 1.8 trillion private credit market, CEO Dimon has issued several warnings on this issue. In his annual letter released on April 6, he also cited private credit as a potential future risk factor for the market. However, he drew a clear line, stating that "it will not cause systemic risk," which aligns with his statements on this day.

Regarding the ongoing conflict between the United States, Israel, and Iran, Dimon warned that such geopolitical tensions are increasing inflationary pressures. However, he clarified that he is not currently worried about inflation itself. In his annual letter, CEO Dimon had noted that inflation risks could be the "skunk at the party," spoiling the good times.

CEO Dimon said, "The worst-case scenario is stagflation (rising prices amid economic stagnation), and I would never rule out that possibility." He added, "In my view, there are many factors fueling inflation, including the war with Iran, global rearmament, worldwide infrastructure demand, and our own fiscal deficit."

When asked about his intentions to run for president of the United States, he replied, "It's already too late," and added, "If you drafted me, I'd be happy to do it, but I can't get through the primaries. Besides, I really love what I'm doing now."

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