Jamie Dimon, CEO of JPMorgan Chase & Co. ( JPM ) , cautioned that the tariffs imposed by President Donald Trump could trigger inflation and decelerate the U.S. economy.

What Happened: In his yearly letter to shareholders, Dimon discussed the implications of Trump’s tariff policy announced on April 2. He warned of potential short-term effects, including inflationary impacts on both imported and domestic goods, reported CNBC. “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products,” Dimon said.

Dimon expressed worries about the tariffs’ potential to hinder economic growth. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he stated.

Dimon also highlighted the uncertainties stemming from Trump’s tariff policy, such as its effects on global capital flows, the strength of the dollar, corporate earnings, and potential reactions from trading partners. He called for a swift resolution, stating, “The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse.”

Following the negotiations, Dimon hopes that the tariffs will ultimately yield long-term benefits for the U.S.

The JPMorgan ( JPM ) CEO warned that inflation could be more persistent than anticipated, leading to high interest rates even as the economy slows.

Despite recent declines, Dimon noted that stock and debt prices are still elevated.  "Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure," he wrote to the shareholders.

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Why It Matters: Dimon is the first major Wall Street bank CEO to publicly comment on Trump’s extensive tariff policy amid a global market downturn. Notably, the JPMorgan ( JPM ) CEO’s remarks represent a gradual departure from his January position, where he suggested that people should "get over" tariff concerns and that they are beneficial for national security.

By March, in a conversation with Adobe‘s CEO Shantanu Narayen at Adobe's annual summit, Dimon characterized the economy as being in a "soft landing" phase, “but there’s a lot of turbulence out there.” He underscored the uncertainty surrounding President Donald Trump‘s proposed tax plan and the potential ramifications of tariffs on the global economy.

While Dimon did not point to a recession, JPMorgan Chase ( JPM ) analyst Maia G. Crook raised the probability of a U.S. recession to 60%, up from 40% last month, calling it the “largest U.S. tax hike in nearly 60 years.”

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.