JPMorgan Chase CEO Jamie Dimon continues to caution that a U.S. recession remains a distinct possibility—even after the recent de-escalation in U.S.-China trade tensions.
Speaking at JPMorgan’s annual Global Markets Conference in Paris, Dimon emphasized that despite improving market sentiment following progress on tariff negotiations, the broader economic picture remains clouded by several unresolved risks that could constrain growth.
“I’m going to defer to the economists who currently peg the risk of a recession at about 50%,” Dimon said. “We might avoid one, and I hope we do, but I wouldn’t take the possibility off the table.” His comments reflect a measured stance at a time when the consensus view among some market participants has turned more optimistic, following a framework agreement to reduce certain tariffs between the U.S. and China.
However, Dimon pointed to a combination of structural and cyclical headwinds that continue to threaten the economic outlook. Chief among them: the persistence of tariff-related uncertainty, rising interest rates, a widening U.S. fiscal deficit, and intensifying geopolitical tensions. These factors, he noted, have collectively weighed on corporate decision-making and delayed capital deployment—key drivers of long-term growth.
Even with tariff reductions on the table, Dimon noted that many of the rollbacks—especially those concerning China—are temporary and contingent on a 90-day negotiation period. That timeframe, he warned, is unlikely to yield a comprehensive or enduring resolution. “I don’t expect an immediate resolution that satisfies all parties within 90 days,” Dimon said. “The timeline itself creates uncertainty, and uncertainty has a cost.”
For wealth managers and institutional allocators, Dimon’s remarks underscore a crucial consideration: while equity markets may rally on headline-driven trade optimism, underlying fundamentals remain challenged by policy ambiguity and macro risks. Dimon added that even the current level of tariffs—whether permanent or provisional—continues to weigh on capital expenditures. “You see businesses hesitating, reassessing their plans, and holding back on investment decisions,” he said.
JPMorgan’s own economists recently lowered their probability of a recession in the next 12 months from 60% to just under 50% in light of progress on the U.S.-China front. Still, they emphasized that the downside risks remain elevated, particularly in the absence of durable policy clarity. Dimon echoed that sentiment, noting that a sustainable path forward will require more than just tariff rollbacks—it will require resolution of broader fiscal and geopolitical tensions.
Dimon’s view contrasts with some of the more bullish voices on Wall Street who have revised their economic forecasts upward in response to the trade thaw. A number of institutions, including Goldman Sachs and Barclays, have trimmed their odds of a recession in the near term. However, these revisions remain tempered by concern over residual trade frictions and the impact of rate normalization.
For financial advisors and portfolio managers, Dimon’s outlook serves as a reminder to remain cautious about extrapolating short-term trade relief into long-term growth assumptions. He anticipates that market volatility is likely to persist as investors navigate through conflicting signals. “I would expect continued volatility,” he said. “It’s a mistake to assume that the environment we’re in—layered with tariffs, geopolitical risks, and rate shifts—will settle into a low-volatility regime anytime soon.”
Dimon also noted that while some clarity on tariffs is a positive development, it has yet to reverse the broader caution among business leaders. “The trade overhang is real,” he said. “Even though we’ve seen some easing, there’s still a strong sense of hesitation. Companies want visibility before making longer-term commitments.”
In that context, the investment landscape for advisors remains complex. The muted optimism around the U.S.-China deal may warrant tactical adjustments, but Dimon’s remarks suggest that strategic positioning should continue to account for late-cycle dynamics and headline risk.
He further cautioned that inflationary pressures may also reemerge if tariffs continue to impact global supply chains. Combined with rising interest rates, the potential for higher inflation could complicate the Federal Reserve’s policy path and add further strain on the economy. “Tariffs don’t just slow trade—they introduce pricing pressures, and when you pair that with tight labor markets and higher wages, it’s a mix that could drive inflation higher,” he said.
The implication for wealth professionals is clear: ongoing diligence in portfolio construction is critical, with special attention to global exposures, sector vulnerabilities, and the duration profile of fixed income allocations. In particular, Dimon’s concern about inflation and interest rate volatility points to the importance of reassessing real asset allocations and inflation-sensitive investments.
Moreover, his warning about investment pullbacks highlights the risk of a slowdown in business capital formation—traditionally a key contributor to GDP. “When companies slow down their investment cycles, it affects employment, productivity, and long-term competitiveness,” Dimon said.
In the current climate, Dimon advocates for maintaining balance—neither overreacting to temporary improvements in sentiment nor ignoring the persistent structural risks that continue to shape the macro environment. “Markets are forward-looking, and they often react quickly to news,” he said. “But as investors, we need to assess the sustainability of these developments before drawing long-term conclusions.”
Dimon’s prudent approach resonates with other veteran investors who have expressed concern that market rallies driven by trade optimism may be overlooking broader systemic risks. Even as equities have rebounded from their April lows, much of that performance has been fueled by expectations rather than fundamental reacceleration.
For RIAs guiding high-net-worth and institutional clients, Dimon’s message serves as a practical framework: remain flexible, focus on risk-adjusted returns, and don’t assume that short-term relief from policy uncertainty eliminates longer-term headwinds. Rebalancing, tactical hedging, and stress-testing portfolios against various macro scenarios may be warranted given the potential for renewed volatility.
He concluded his remarks in Paris by reiterating that caution is warranted—even in the face of apparent progress. “The issues we face—trade, fiscal discipline, geopolitical realignment—are not going away overnight,” he said. “We have to be prepared for both the upside and the downside.”
Dimon’s perspective aligns with a growing view among institutional investors that the current cycle may be stretching longer but remains fragile. Even as recession odds have moderated, the global economic expansion appears to be losing momentum, and the policy environment is increasingly unpredictable.
As a result, financial professionals should continue to take a measured view of recent developments. While the U.S.-China deal has removed a near-term obstacle, it does not eliminate the need for prudent risk management. Dimon’s outlook, grounded in caution and tempered optimism, reinforces the importance of scenario planning and disciplined portfolio oversight heading into the back half of the year.
