JPMorgan's Dimon warns Iran war may drive inflation and interest rates higher

By Saeed Azhar

NEW YORK, April 6 (Reuters) - JPMorgan Chase CEO Jamie Dimon warned connected Monday that the warfare successful Iran risks lipid and commodity terms shocks that could support ostentation sticky and propulsion involvement rates higher than the ‌market present expects.

The informing came successful an yearly missive to shareholders a time aft U.S. President Donald Trump ratcheted up ‌pressure connected Iran, threatening to people its powerfulness plants and bridges connected Tuesday if it does not reopen the Strait of Hormuz, a cardinal waterway.

Dimon, 70, who has ​run JPMorgan, the largest U.S. slope for 2 decades, besides said the backstage recognition assemblage "probably" does not contiguous a systemic risk, contempt investors' caller moves to propulsion backmost from specified funds amid worries that advances successful AI volition wounded underlying borrowers.

"The challenges we each look are significant," Dimon added, citing geopolitical risks specified arsenic the warfare successful Ukraine, broader hostilities successful the Middle East and hostility with China.

"Now, due to the fact that of the warfare successful ‌Iran, we additionally look the imaginable for important ⁠ongoing lipid and commodity terms shocks, on with the reshaping of planetary proviso chains, which whitethorn pb to stickier ostentation and yet higher involvement rates than markets presently expect."

Time volition archer whether the Iran warfare ⁠achieves the United States' objectives, Dimon said, adding that atomic proliferation remains the top information from Iran.

War-driven ostentation worries person led markets to mostly regularisation retired involvement complaint cuts this year, aft monetary easing fuelled grounds equity highs past year.

Last week, the benchmark S&P 500 scale closed its worst-performing 4th since 2022, ​weighed ​down since precocious February by the warfare and the resulting spurt successful vigor ​prices.

Dimon said the U.S. system continued to beryllium resilient, withconsumers ‌still earning and spending, though with immoderate caller weakening, and businesses are inactive healthy.

But helium cautioned the system had been fuelled by ample amounts of authorities shortage spending and past stimulus, portion accrued expenditure connected infrastructure remained a increasing need.

The fiscal stimulus from President Donald Trump's "Big, Beautiful Bill," deregulation policies and artificial intelligence-driven superior spending are different positives for the economy, Dimon said.

PRIVATE CREDIT MAY NOT BE A SYSTEMIC RISK

Dimon said the $1.8-trillion backstage recognition marketplace is comparatively small. But erstwhile the recognition rhythm weakens, helium warned, losses connected each leveraged lending volition ‌be higher than expected arsenic recognition standards person been weakening modestly crossed the ​board.