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- JPMorgan CEO Jamie Dimon sounded the alarm on a series of risks looming over global markets.
- "This may be the most dangerous time the world has seen in decades," he said.
- Dimon pointed to geopolitical turmoil, the Fed's quantitative tightening, and soaring debts.
As headwinds keep stacking up against global markets, investors might be operating in the most unstable period in recent memory, according to the CEO of the world's largest bank.
"This may be the most dangerous time the world has seen in decades," Jamie Dimon said in a JPMorgan earnings press release. "While we hope for the best, we prepare the Firm for a broad range of outcomes so we can consistently deliver for clients no matter the environment."
He listed a series of risks looming over markets. For example, Dimon warned that the Federal Reserve's quantitative tightening campaign had unclear long-term consequences.
The strategy, where the Fed reduces liquidity by not reinvesting the proceeds from matured assets on its portfolio, has been implemented only once before — it was cut short in 2019, as banking reserves were being drained.
QT's timing today is made worse by regulators looking to tighten capital requirements on lenders, Dimon said, limiting the economy's "market-making capabilities."
That's as international policymakers have proposed that banks increase the amount of capital they must hold, in order to avoid a repeat of the Silicon Valley Bank failure that caused wide-spread sector stress last March.
Dimon also reiterated concerns of higher interest rates to come, having previously noted 7% levels as a real possibility. That's as consistent labor market tightness and history's largest peacetime fiscal deficits run the risk of higher inflation.
Added to that is growing US debt, which has drawn increasing criticism for its potential to worsen interest rates and eventually lead to fallout, if left unchecked.
Uncertainty will also grow due to rising geopolitical friction, Dimon said, with both the Ukraine and Israeli conflicts adding to pressure on energy and food markets, global trade, and international tensions.
Despite Dimon's concerns, JPMorgan's reported strong third-quarter results, helped by higher interest rates and its acquisition of First Republic Bank earlier this year.
"The Firm delivered another quarter of solid results, generating net income of $13.2 billion and an ROTCE of 22%—although, we acknowledge that these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time," Dimon wrote.