U.S. stock market is ‘inflated’

JPMorgan Chase CEO Jamie Dimon on Wednesday he called the US stock market inflated and said he felt more cautious than others in the business world because of the risks from deficit spending, inflation and geopolitical turmoil.

“Asset prices are kind of inflationary, by any measure. They’re in the top 10% or 15%” of historical valuations, Dimon told CNBC’s Andrew Ross Sorkin at the World Economic Forum in Davos, Switzerland.

Dimon said he was talking specifically about the US stock market, which is in the midst of a multi-year run.

The S&P 500 had consecutive annual gains of more than 20% in 2023 and 2024, the first time that has happened in more than 25 years. Last year, Dimon also called the shares of his own company darling

On Wednesday, Dimon also noted that parts of the bond market, such as sovereign debt, are “at all-time highs.”

“So yes, they are high, and you need pretty good results to justify those prices,” Dimon said. “Having pro-growth strategies helps make that happen, but there are negatives here, and they can tend to surprise you.”

Dimon, 68, is one of the most respected voices in finance after building JPMorgan into the largest US bank by several measures, including assets and market valuation.

He has been sounding a note of caution since 2022, when he said “hurricane“It was moving forward for the economy of the United States. This storm, however, has not yet arrived as the United States has exceeded expectations in recent years, and the election of Donald Trump in November has stimulated the hope around what a pro-growth administration will do.

“I’m a little more cautious around a lot of subjects,” Dimon said Wednesday. “What I’m a little cautious about is deficit spending; it’s a global problem, not just an American problem,” he said. “And the connections [question]”Will Inflation Go Away?” I’m not so sure.”

The rising tide of global conflict, including the war in Ukraine, tensions in the Middle East and growing threats from China has me “just very concerned about how it’s going to affect our world for the next 100 years,” Dimon said. .

In the wide-ranging interview, Dimon expressed support fee on imports to the United States strengthen national security, and said that he and the technology entrepreneur Elon Musk to get smoothed out a previously controversial relationship. Dimon also said he had no plans to run for office in 2028.

After Wednesday, Goldman Sachs CEO David Solomon acknowledged that the stock valuations were high, while indicating that they could be justified by excitement over the impact of both artificial intelligence and the steps expected by President Trump relax regulation for US companies.

“It’s hard to argue with the fact that equity multiples are high,” Solomon said. “Markets are looking forward, and we’re facing a very, very tough regulatory environment across all industries.”

If Trump administration officials allow more mergers, increasing capital markets activity, it could boost GDP growth by half a percentage point, Salomon said.