A year after JPMorgan Chase & Co. chief executive Jamie Dimon singled out geopolitics as the world’s biggest risk, he is again sounding the alarm, warning that the situation for global stability has taken a turn for the worse.

"My warning is all the geopolitical issues, which could determine the state of the economy," Dimon said in an interview during a visit to India. "Geopolitics are getting worse, they're not getting better. There's the risk of accidents with energy supplies. Who knows if other countries will step in. There are a lot of wars going on right now," he said, referring to attacks by Yemen's Houthi rebels in the Red Sea.

According to the U.S. military, Houthis have attacked at least two crude oil tankers this month.

“Geopolitical instability is my biggest concern,” Dimon said, urging the U.S. to prepare for a protracted war between Ukraine and Russia.

Dimon sees geopolitical risks as a bigger risk than high inflation or a U.S. recession.

After a long period of stubborn inflation, the Federal Reserve made a big rate cut last week, the first since March 2020. Traders followed suit, pushing the S&P 500 to a record closing high on Monday.

But Dimon expressed skepticism about the U.S. economy and its market pricing.

“I’m a long-term optimist, but in the short term, I’m more skeptical of people who say everything is going to be fine,” he said. “Market pricing suggests everything is going to be fine. Let me be on the side of caution.”

When asked about the geopolitical impact of the U.S. election, Dimon said: "I think U.S. policy toward Israel will remain largely the same - supporting Israel and promoting peace."

Dimon said that the price of oil and gas is determined by supply and demand. This also includes sentiment and inventory. Taken together, there is currently an oversupply. Europe had to change its flow because of Ukraine. This is a good lesson when we discuss energy security, reliability, and affordability. Looking ahead, there may be a shortage of oil supply. This may be in the next one or two years.

Dimon was cautious about whether the U.S. economy had achieved a soft landing and said the Fed was right to cut interest rates. He said: "A 50 basis point cut is probably the right thing to do. The underlying economy is still continuing to grow. But remember, they are also responding to economic growth. Prices have been coming down very nicely. So far, so good."

The article is forwarded from: Jinshi Data