JPMorgan's Dimon Talks Iran War, Inflation, Credit Cycles
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What is the main topic discussed in this episode?
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News. All right, folks, we've got another great voice to talk about the environment, the macro. We're talking about Jamie Dimon. He's, of course, the CEO of JPMorgan Chase, and he is there in Miami at the JPMorgan Global Leverage Finance Conference with our own Lisa Abramowitz, one of the co-hosts of Bloomberg TV's Surveillance. Lisa, take it away.
Thank you so much, Carol. I am here with somebody who does not need an introduction, Jamie Dimon, who is the CEO and chairman of JP Morgan. It's a really interesting day to have this. First of all, huge turnout. But the focus, at least in the news world, is very much in the geopolitics. And I'm wondering, from your perspective, you talked about geopolitics for a long time. Are you surprised that the market has been so sanguine to any kind of response or any kind of geopolitical disruption?
Hi, Lisa. Hi, Bloomberg. Not really. So one of our brilliant folks wrote a report years ago, Mike Semlos, that if you look at all these wars around the world since World War II, The market reacts, but it never had a real long-term effect other than the Israeli conflict where the oil prices tripled and went out for an extended period of time in 1973. So the world kind of takes its stride, but geopolitics is a major issue. It's much more complex today than it has been since World War II. I'm talking about Ukraine, Russia, Iran, North Korea, all related with China. And that could have an effect, but it may not. So these things may diminish over time. This war with Iran, if it's short and oil goes to 80 or 90 or 100, but it's short and not prolonged, it probably won't have a major effect.
If it becomes prolonged, then all bets are off the table.
How offsides would this market be if there were truly a stagflationary shock, given the fact that there seems to be comfort with the idea of disinflation right now?
Well, I think that's true, but I think that was true before this war. So if you look at, you know, my view is that the price, asset price is kind of high, credit price is kind of low. It's kind of a lot of complacency in the market. I'm not sure, you know, we look at risk, we look at the broad range of outcomes, and there are negative outcomes, but one of them would be, you know, inflation. I call it, that's the skunk at the party. So it's been coming down, but it seems to maybe have leveled off around 3%. If things make it go up, and this is only one thing, You can look at medical prices, construction prices, insurance prices, wages for certain things.
What impact does the Iran war have on global markets?
Other things, inflation's a big thing, it's not just oil. So we'll see, right now this will add a little bit, literally a teeny bit to inflation, not a lot.
I was surprised because things were kind of gloomy coming into today, and the mood here is not that. Actually there's a lot of optimism, there are a lot of different companies that are building things and investing things. I mean, how vulnerable really is the US economy right now to some sort of geopolitical shock?
Well, it may not be geopolitical. It may be the companies that start to lay people off. The most important thing in the world today is geopolitical. What happens to the free Western democratic world, which has kind of been under attack by Russia and Ukraine, by Iran in the Middle East, a little bit by China who wants to divide and conquer the Western world. you know, both militarily and economically. You know, you have all their neighbors are rearming because of their actions, not because of anyone else.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–2:53
2
What impact does the Iran war have on global markets?
2:53–4:46
3
How do geopolitical tensions affect market reactions?
4:46–9:19
4
What is Jamie Dimon's perspective on inflation and economic risks?
9:19–12:48
5
How vulnerable is the US economy to geopolitical shocks?
12:48–16:51
Speakers
6 identifiedMore from Bloomberg Talks
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