JPMorgan CEO Jamie Dimon Warns U.S. Stock Market Is Overvalued, Cautions on Global Economy
JPMorgan Chase CEO Jamie Dimon said Wednesday that the U.S. stock market is overvalued and explained why he holds a more pessimistic view of the global economy than many on Wall Street.
"Asset prices are kind of inflated," Dimon told CNBC’s Andrew Ross Sorkin in an interview at the World Economic Forum in Davos, Switzerland. He clarified, "I’m talking about the U.S. stock market—it’s not true for stock markets around the world."
Soaring Stock Prices & Market Risks
U.S. stocks have been among the world’s top performers in recent years, driven by a strong economy, resilient labor market, and steady consumer spending, even amid high interest rates. Wall Street expects the outperformance to continue this year, fueled in part by President Donald Trump’s deregulation and tax-cutting policies.
However, Dimon remains skeptical. When asked why he is “cautiously pessimistic” instead of “cautiously optimistic,” he pointed to elevated stock valuations.
“You need really good outcomes to justify those prices,” he said. “Having pro-growth strategies helps, but negatives exist, and they can surprise you.”
By one metric, Trump is inheriting the most expensive U.S. stock market in history. The Wall Street Journal reports that on Trump’s second inauguration day, the market’s Shiller P/E ratio was 44% higher than at the start of Herbert Hoover’s presidency, just months before the 1929 stock market crash and the Great Depression.
Concerns Beyond Stocks: Geopolitical Tensions & Deficit Spending
Dimon’s concerns extend beyond high stock prices. Echoing his remarks from JPMorgan’s latest earnings report, he cited long-term risks tied to geopolitical tensions in Europe, the Middle East, and Asia. He also flagged global sovereign debt levels as another pressing issue.
"What I’m a little cautious about is deficit spending," Dimon said. "It’s a global issue, not just an American issue. And as for whether inflation will go away? I’m not so sure."
With economic uncertainty mounting, Dimon’s warning serves as a reminder that while markets may be booming, risks still loom on the horizon.
