CNN
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While many economists are saying the risk of an imminent recession has diminished since China and the United States agreed to lower tariffs earlier this week, JPMorgan Chase’s CEO, Jamie Dimon, is still penciling one in.
“I wouldn’t take it off the table at this point,” Dimon said in a Bloomberg TV interview on Thursday at an annual conference the bank hosts in Paris.
After the trade breakthrough from weekend talks in Geneva between Trump administration officials and Chinese government officials, JPMorgan economists lowered the risk of the US economy entering a recession to below 50% from 60% previously.
Dimon said the agreement the US reached with China, which entailed the US lowering tariffs on most Chinese goods to a minimum of 30% from 145% and China lowering tariffs on most American goods to 10% from 125% for the next three months, was “the right thing to do.”
“It obviously calms down the markets. That’s not the reason to do it, but the markets do vote, or something like that,” he said. After the deal was announced on Monday, US stocks surged, with the Dow closing nearly 1,200 points higher on that day. Now the index is just barely in negative territory for the year after it, along with other major indexes, fell sharply last month after President Donald Trump rolled out a slew of higher tariffs.
Meanwhile, the Nasdaq, which had entered a bear market on April 4, closed up more than 20% earlier this week from its lowest point this year — exiting its bear market and marking the start of a new bull market. (A rise of 20% from a recent low generally marks a bull market.)
The considerable volatility financial markets experienced over the past few months has benefited JPMorgan Chase because it resulted in higher trading volume, Dimon said. But that isn’t always the case when markets see big swings. “This one happened to be good. The next go around may not be so good,” he said.
For centuries, investors across the globe have flocked to invest in American financial assets, especially government-backed debt during times of heightened uncertainty because of the perceived stability. But there’s a looming question over whether the “American brand” has been tarnished due to the trade war Trump has picked, which has pushed investors to look abroad to other markets, such as Europe.
Dimon challenged the notion that American companies have a leg up over foreign ones. “You do not have a divine right to success,” he said, before naming a slew of American businesses that have failed.
“We shouldn’t assume it’s forever,” he said, referring to American exceptionalism. But at the same time, he pushed back at the view that America has lost its luster as a place to invest, saying: “If you were to take all of your money and put it in one country, it would still be America.”
Dimon said during the Thursday interview that he does not see Trump regularly but speaks to “all of the folks there.”
He also said he believes France’s President Emmanuel Macron “is one of the best political leaders on the planet today.”
