Dimon: Markets Underprice Risks, Won't Buy Stocks or Treasurys
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- Jamie Dimon said investors are underestimating geopolitical and fiscal risks facing the global economy, and he wouldn't buy equities or long-dated U.S. Treasurys at current prices.
- Dimon pointed to wars in Ukraine and the Middle East, U.S.-China tensions, rising military spending, and mounting government deficits as threats he believes markets aren't fully pricing.
- Dimon said the 10-year Treasury yield should probably be at 4% to 4.5% even if inflation falls to the Fed's 2% target, predicting "bond vigilantes" will eventually demand higher compensation to finance U.S. debt.
- Dimon compared today's AI spending boom to the early internet era, noting Yahoo and Netscape faded while Google and Facebook emerged as eventual winners — and warned the AI payoff won't match the expected timetable.
- Dimon acknowledged the global economy has become more resilient due to lower energy dependence than in previous decades, but cautioned that doesn't eliminate the chance of a sudden inflection point.
- The S&P 500 has returned nearly 10% this year as investors shrugged off wars and tariffs, while JPMorgan and its peers posted blockbuster quarterly results fueled by surging trading and investment banking revenue.
Why it matters: Dimon's bearishness directly contradicts the market's current mood — the S&P 500 is up nearly 10% in 2025 and his own bank just posted blockbuster trading and investment banking earnings. His specific view that 10-year yields should sit at 4-4.5% challenges the Treasury market's pricing of long-term fiscal risk, and his dot-com analogy for AI spending signals skepticism about near-term returns despite the rally driving indexes higher.
